South Africa: Increased Support for Automotive, Clothing Sectors

Pretoria - The Department of Trade and Industry (dti) is set to increase support for the automotive and clothing sectors, says Minister Rob Davies.

"Firstly, we see acceleration in the automotive sector, where the Automotive Production Development Programme (APDP) has already supported significant new investment in the sector. Projected capital expenditure for 2014 is anticipated to reach a record level of R7.9 billion," said the minister.

Minister Davies was delivering the dti Budget Vote on Tuesday evening in Cape Town.

The work of the APDP has been acknowledged by big industry role players such as the National Association of Automobile Manufacturers of South Africa (Naamsa), who have largely attributed the relatively high levels of capital expenditure to this programme.

The APDP's objective is to raise the volume of cars manufactured in South Africa to 1.2 million annually by 2020, as well as to diversify the component chain.

Minister Davies said that in the coming year, the APDP will undergo an early review.

"[This] will make us take stock of efforts and determine what more can be achieved in growing the industry in South Africa," said the minister.

In other efforts to grow the sector, the Automotive Supply Chain Competitiveness Initiative (ASCCI) was launched last year to enhance localisation, production and supplier capabilities. Minister Davies said this was proving to be a success, and his department will continue to expand the programme.

Minister Davies said since the introduction of the Automotive Investment Scheme (AIS) in 2010/11, public sector-approved incentives amounted to R6.3 billion and supported investments worth R23 billion by original equipment manufacturers (OEMs) in the automotive sector.

The intention of the AIS is to grow and develop the automotive sector through investment in new and replacement models, as well as the manufacturing of automotive components. The objective here is to increase plant production volumes, sustain employment and strengthen the automotive value chain.

"Given that automotives comprises 30% of our industrial sector, with strong linkages to other manufacturing sub-sectors, the impact of such investment on our domestic economy is significant," said Minister Davies.

The country's automotive sector employs in excess of 100 000 people.

"It is an important sector and we will continue to support it," he said.

Clothing, textile sector

Another important labour absorbing sector for South Africa is that of clothing, textiles, leather and footwear.

The dti has managed to stabilise this sector through improved monitoring of imports to ensure compliance with customs and excise regulations and to reduce unfair and illegal imports.

It has also been stabilised through the designation of the sector under the Preferential Procurement Policy Framework Act (PPPFA) and collaboration with key retailers to encourage local procurement.

The introduction of the Clothing & Textile Competitiveness Programme (CTCP) in 2010 has also helped. "In the coming year, the department will continue to roll out the CTCP to reach more companies within the sector and I will announce in the near future details of a significant programme to increase value addition in the exotic leather and animal hide industries through the National Exotic Leather Cluster," Minister Davies said.


The dti will continue to play its role in ensuring that government procures 75% of its goods and services from local companies. The dti has already designated goods and services such as power pylons and pharmaceuticals.

The next designation of products for government procurement includes steel and building and construction materials, among others.

Minister Davies encouraged the private sector to buy more from local companies. -

Source :

Posted on : 20 May,2024 | News Source : ABNews

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