The Automotive Investment Scheme (AIS) is an incentive designed to grow and develop the automotive sector through investment in new and/ or replacement models and components that will increase plant production volumes, sustain employment and/ or strengthen the automotive value chain.
Objectives of incentive scheme
Strengthen and diversify the sector through investment in a new and/or replacement models and components.
Increase plant production volumes.
Sustain employment and/or strengthen the automotive value chain.
The AIS provides for a non-taxable cash grant of twenty percent (20%) of the value of qualifying investment in productive assets and twenty five percent (25%) of the value of qualifying investment in productive assets by component manufactures and tooling companies as approved by the dti.
An additional non-taxable cash grant of five percent (5%) may be made available for projects that maintain their base year employment figure throughout the incentive period, and achieve at least two of the following economic requirements:
Research and development in South Africa;
Strengthening of the automotive value chain;
Value addition; and
To qualify for an additional grant of five percent (cumulative 10%), the project must demonstrate the following:
In respect of light motor vehicle manufacturer: a specified increase in unit production per plant ; and
In respect of component manufacturers: a specified increase in turnover and manufacturing of components that are currently not being manufactured in South Africa.
Light motor vehicle manufacturers that have achieved, or can demonstrate that they will achieve, a minimum of 50 000 annual units of production per plant, within a period of three (3) years; or
Component or deemed component manufacturers that are part of the Original Equipment Manufacturer (OEM) supply chain; or
Will achieve at least 25% of total entity turnover or R10 million by the end of the first full year of commercial production as part of a light motor vehicle manufacturer supply chain, locally and / or internationally.
Light Motor Vehicle Manufacturers
Should have achieved or can demonstrate that it will achieve, within three years, a minimum of 50 000 annual units of production per plant.
Should demonstrate that it will achieve within three years a minimum of 50 000 annual units of production per plant.
Component Manufacturers or Deemed Component Manufacturers
A component manufacturer that can prove that a contract is in place and/or a contract has been awarded and/or a letter of intent has been received for the manufacture of components to supply into the light motor vehicle manufacturer supply chain locally and/or internationally;
A component manufacturer that can prove that after this investment it will achieve at least 25% of total entity turnover or R10m annually by the end of the first full year of commercial production, as part of a light motor vehicle manufacturer supply chain locally and/or internationally.
Competitiveness Improvement Costs for Component Manufacturers, Deemed component Manufacturers and Tooling Companies
The objective of this benefit is to improvethe competitiveness of component manufacturers through the improvement of processes, products, quality standards and related skills development through the use of business development services.
The grant will be limited to the competitiveness improvement costs incurred within the first three years after the start of production date and a total grant amount of R1 million per entity per three year cycle.