Medium and Heavy Commercial Vehicles Automotive Investment Scheme (MHCV-AIS)
The Medium and Heavy Commercial Vehicles Automotive Investment Scheme (MHCV-AIS) forms a sub-component of the broader Automotive Investment Scheme (AIS). The South African government introduced the AIS to grow and strengthen the automotive sector through targeted investment. Specifically, the programme supports new and replacement vehicle models and component manufacturing.
Through this initiative, government aims to increase production volumes, sustain employment, and reinforce the automotive value chain. As a result, qualifying manufacturers can expand capacity while improving long-term competitiveness.
Who Qualifies
The MHCV-AIS provides funding to manufacturers of trucks, bus chassis, truck bodies, and bus bodies. In addition, component manufacturers that supply these industries may also qualify.
To access funding, applicants must operate within the medium and heavy commercial vehicle segment. Furthermore, they must demonstrate that their investment supports production growth, competitiveness, or job sustainability.
Qualifying Investment Costs
Applicants may claim incentive benefits against specific qualifying costs. These include newly acquired buildings and infrastructure linked to production activities.
In addition, manufacturers may claim costs for new or second-hand plant, machinery, tooling, and refurbished or upgraded equipment. By investing in modern production assets, firms can improve efficiency and output.
Component manufacturers may also claim competitiveness improvement costs. These costs include process upgrades, product improvements, quality certification systems, and information technology enhancements. Consequently, businesses can strengthen operational performance while meeting international standards.
Objective of the Medium and Heavy Commercial Vehicles Incentive
The primary objective of the Medium and Heavy Commercial Vehicles incentive is to enhance the competitiveness of South African manufacturers. The programme encourages firms to improve processes, upgrade products, and adopt higher quality standards.
Moreover, it promotes related skills development through business development services. By supporting these improvements, the incentive helps manufacturers compete both locally and globally.
Grant Structure and Limits
Manufacturers of medium and heavy automotive vehicles may qualify for a non-taxable cash grant ranging between 20% and 30% of qualifying investment. Meanwhile, component and tooling manufacturers may receive between 25% and 35%.
However, the programme limits grants linked to competitiveness improvement costs. The MHCV grant covers only costs incurred within the first three years after the start of production. In addition, it caps the total grant at R1 million per entity per three-year cycle.
Therefore, applicants should structure investments carefully to maximise available benefits within the qualifying period.
Application Timeframes
Applicants must submit funding applications well before making the qualifying investment. Heavy commercial vehicle manufacturers must apply at least 120 days prior to investment. Component and tooling manufacturers must apply at least 90 days in advance.
Early submission ensures proper evaluation and compliance with programme requirements. Consequently, businesses should integrate the application timeline into their overall project planning.
Strategic Importance of the Medium and Heavy Commercial Vehicles Incentive
The Medium and Heavy Commercial Vehicles incentive offers significant financial support to manufacturers seeking expansion or modernisation. By reducing capital costs, the scheme improves project feasibility and strengthens investor confidence.
Furthermore, it supports job retention and industrial growth within South Africa’s automotive sector. Companies that align their investment strategy with programme objectives stand to gain substantial non-taxable benefits.
Businesses seeking structured support with funding applications should obtain professional guidance to ensure compliance and maximise grant value.
Contact us for more information on funding through the Medium and Heavy Commercial Vehicles Scheme.