The Automotive Investment Scheme (AIS) is an incentive established to promote growth and development of the automotive sector which is offered within South Africa’s Automotive Production and Development Programme (APDP). It aims to increase plant production volumes, sustain employment and strengthen the automotive value chain. This is done via investment through new or replacement models and components.
Automotive Investment Scheme (AIS)
Benefits of the Automotive Investment Scheme
- Research and development in South Africa;
- Employment creation;
- 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
Objective of the Automotive Investment Scheme
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.
Eligible Entities for the Automotive Investment Scheme
1. Light motor vehicle manufacturers:
- Such manufacturers must achieve or show that they will achieve a minimum of 50 000 annual units of production per plant, within a period of three years.
2. 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, that are part of the Original Equipment Manufacturer (OEM) supply chain.
- 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.
Helpful Guidelines based on the Automotive Investment Scheme (AIS)
Second hand machinery, equipment and tooling would be considered for the grant based on an appointed DTI Consulting Engineer confirming that this technology is at an acceptable level and that the assets were never incentivized by any of the DTI incentives and/or programmes administered by the International Trade Administration Commission (ITAC).
A warehouse that is part of the factory for storage of material and finished components would be considered for the incentive. It must be located in the same premises where manufacturing takes place.
A detail of the claiming schedule (claim periods and submission dates) is attached to the approval letter sent to each approved applicant. Claim periods are as follows:First Claim: Start of Commissioning to 1 day prior to Start of Production Second Claim: Start of Production + 12 monthsThird Claim: Start of Production + 24 months.
All claims have to be submitted within six months after the end of the claim period.
Completed applications should reach the offices of the DTI no later than 120 days prior to commencement of production for OEMs and 90 days prior to commencement of production for component manufacturers, deemed component manufacturers and /or tooling companies.
Only assets used in the entity’s South African operations may qualify.
Why Dream Team Capital (DTC) to assist you further…
We are dedicated to the provision of professional corporate services characterized by independent and creative thinking to maintain our leadership position and credible reputation.
Our work encompasses mutual trust with each client; international companies as well as small- and medium-sized enterprises. Each client’s activities, products and professional environment are carefully taken into consideration; our goal is to provide tailor-made solutions to the client’s specific business and other corporate needs.
Our strength is the ability fully to grasp the exact niche needed in your line of business, whether the need is full implementation, consulting, or service and mentoring; we provide the support and expertise to help you achieve your vision. This is one of our core competencies.
We will help define who you are, what you provide, what your market needs and ensure your business proposal is sound and achievable.
At DTC we understand the complexities of the various business grants and the process for each. We have assisted thousands of entrepreneurs through the application process to access business grants, and we can assist you with the same.
Contact us for further information on this incentive on the Automotive Incentive Scheme and assistance to access the grant and funding…