APDP review to look at component makers, post-2020 period

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BY: IRMA VENTER 

Government’s review of its automotive sector assistance programme, the Automotive Production and Development Programme (APDP), will be concluded this year, says Roger Pitot.

Pitot, who heads up the review, is the Department of Trade and Industry’s adviser on the APDP, and also the former executive director of the National Association of Automotive Component and Allied Manufacturers (Naacam).

The APDP came into effect in 2013, replacing the Motor Industry Development Programme. It is set to run to 2020.

Following the completion of the review, the findings will be made available to Trade and Industry Minister Dr Rob Davies, “who will make an announcement on the matter”, says Pitot.

“Part of my recommendations is what to do after 2020, yes,” he confirms.

He also confirms that another “part of the review” focuses on revisiting incentives to component manufacturers.

Speaking at the South African Automotive Week, held in Midrand in October, Pitot noted that vehicle manufacturers and aftermarket parts producers were “the two big winners” in the APDP in its current format.

Component makers, primarily supplying local vehicle assemblers, “were generally not happy”, and some have even closed their doors, he warned.

Pitot said the APDP provides a production incentive to vehicle producers to localise their parts content, but that the incentive is given to vehicle producers, and not component makers.

Suppliers also have to do “significant administration work” to prepare the necessary documentation for vehicle producers.

Earlier, at the same conference, current Naacam executive director Robert Houdet said the APDP has become “more of an administrative system” for most component makers.

Tier two suppliers also feel that the APDP has little relevance to them, and that “the risk exists that they may disappear in the future”.

Pitot hinted at possible mechanisms that could offset the negatives in the APDP for component manufacturers, such as a rebate on tooling costs, and adjusting incentives to encourage more parts localisation and increased vehicle production.

Edited by: Creamer Media Reporter