People-carrier Automotive Investment Scheme ·

People-carrier Automotive Investment Scheme (P-AIS)

The People-carrier Automotive Investment Scheme (P-AIS) forms a sub-component of the Automotive Investment Scheme (AIS). The Department of Trade, Industry and Competition introduced the AIS to expand and strengthen South Africa’s automotive sector. Government uses this incentive to encourage investment in new or replacement models and components. As a result, manufacturers increase production volumes, sustain employment and reinforce the automotive value chain.

People-carrier Automotive Investment Scheme Grant Structure

The People-carrier Automotive Investment Scheme offers a non-taxable cash grant of between 20% and 35% of qualifying investment in productive assets. The dtic approves these assets before granting support.

The department evaluates projects against specific economic benefit criteria. These criteria include tooling, local research and development, employment creation or retention, value chain strengthening and empowerment contributions.

The dtic pays the approved P-AIS grant over three years. However, the department first assesses whether the project has achieved the agreed performance targets before releasing funds.

SKD Assemblers

Semi Knocked Down (SKD) vehicle assemblers that started production between 1 January 2012 and 31 March 2015 may qualify for a 20% grant on qualifying investment costs.

To secure an additional 5%, the project must maintain base year employment levels throughout the incentive period and during the model phase-out period.

Eligible SKD projects include mono-built motor vehicles designed to transport between 14 and 35 persons, including the driver. These vehicles must exceed 2000kg in mass. They may appear trimmed or untrimmed and painted. However, they must not include engines, transmission assemblies, axles, radiators, suspension or braking components at this stage.

CKD Assemblers

Complete Knocked Down (CKD) vehicle assemblers that started production between 1 January 2012 and 31 March 2015 may qualify for a 25% grant on qualifying investment costs.

CKD investments that commenced production from 1 April 2015 onwards may qualify for a 20% grant.

Projects can earn an additional 5% if they maintain base year employment levels during the incentive and phase-out periods. Furthermore, projects may qualify for a second additional 5% bonus grant, bringing the cumulative bonus to 10%, if they meet the prescribed economic benefit criteria.

Eligible CKD people-carriers must transport between 10 and 35 persons, including the driver, and exceed 2000kg in mass. Manufacturers must not permanently attach floor panels, body sides or roof panels to each other at this stage. In addition, they must not fit engines, transmissions, axles, radiators, suspension, steering, braking or electrical components to the chassis or floor pans.

Component Manufacturers

Component manufacturers may qualify for a 25% grant on qualifying investment costs. To secure an additional 5%, the project must maintain base year employment levels and meet at least two economic benefit requirements.

A component manufacturer must prove that it holds a contract, award or letter of intent to supply components to the medium and heavy commercial vehicle value chain. The manufacturer may supply locally or internationally.

In addition, the manufacturer must demonstrate that, after the investment, automotive supply chain activities will generate at least 25% of total entity turnover or R10 million annually by the end of the first full year of commercial production.

Assistance

The People-carrier Automotive Investment Scheme provides significant financial support for qualifying manufacturers. However, applicants must meet strict investment, employment and economic benefit criteria.

Contact us for professional assistance with qualifying for the People-carrier Automotive Investment Scheme administered by the dtic.