Auto industry needs govt aid

Johannesburg - There was little chance the South African motor industry would be able to manage without government assistance in the near future, said Trade and Industry minister, Rob Davies.

The automotive industry will receive R747m from state coffers, almost 27% of the total budget for industry support in the coming financial year.

On Friday, Davies told Sake24 that all developing countries with a motor industry enjoy significant support from their governments and, without it, South Africa would not be internationally competitive.

The aim of the government's new APDP (Automotive Production and Development Programme) was the production of buses, capital equipment and heavy vehicles.

It also wanted to increase the local content of components manufactured in this country, said Davies.

He was optimistic the new production-incentive budget for the clothing and textile industry, which will amount to R400m in the coming year, would help curb job losses and possibly even create new jobs.

Davies unveiled a new industrial policy programme on Thursday in which he promised to ramp up manufacturing capacity and create 2.47 million jobs in the next decade

Past support programmes were the wrong sort of assistance, but the new incentives would encourage investment in the industry and address the lack of productivity, Davies said.

Davies said he was particularly excited about the review of the Industrial Development Corporation's strategy to make cheaper finance available, and the potential that new state purchasing regulations hold for job creation and the expansion of industrial capacity.

- Sake24.com

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