AUTOINDUSTRYI N T H E E A S T E R N C A P E

Facilitating investment into the province ECDC is the official economic development agency for the Eastern Cape province. The agency aims to create an environment that is conducive for sustainable economic growth by providing channels, platforms and resources to bring about robust economic activity in the province.

As part of the agency’s interventions to grow the provincial economy, ECDC promotes the investment potential of the province, and provides finance and enterprise support services for local enterprises and investors in key growth sectors which include automotive and general manufacturing.

ECDC assists new and existing investors at no cost with:• Identifyingbusinessopportunitiesinkeysectors• Facilitatingandfinancingjointventures• Accessinginvestmentincentiveschemesandlocalbusiness service networks• Creatingaccesstoadiverseportfolioofavailablelandand buildings• Facilitatingcorporaterelocationsandaftercareservices• Lobbyingprovincialandnationalgovernmentforrelevant interventions

providing platForms For global trade ECDC’s trade and export promotion service focuses on creating maximum exposure for Eastern Cape companies while increasing export sales. The agency encourages partnerships between local manufacturers and foreign industry players such as agents and distributors,andalsothroughjointventuresandstrengtheningtiesbetween local exporters and importers.

Besides creating access to foreign trade destinations through preferential trade agreements, ECDC is well-positioned to provide advice and assistance to both investors and exporters interested in harnessing the production, manufacturing and export potential of the province.

Inseveralofitsprogrammesaimedatgrowingexportandtrade,ECDC works closely with the provincial Department of Economic Development and Environmental Affairs, the national Department ofTradeandIndustry,theCoegaandEastLondonIDZ’s,localandregional business chambers.

For more information on automotive opportunities, contact the eastern cape development corporation on tel +27 (0) 43 704 5606, e-mail invest@ecdc.co.za or visit www.ecdc.co.za

EASTERN CAPE

The Eastern Cape is a suitable location for any investor looking to establish a production facility in the Southern hemisphere, both to service the growing local and export markets.

The automotive industry in the Eastern Cape is of national importance. The province produces around 40% of South African car sales and 60% of car exports by unit. When the components industry is included, the province accounts for a significant portion of the South African automotive sector value added and employment in the Eastern Cape.

motor manuFacturers in the eastern cape

Mercedes-Benz South Africa (MBSA)inEastLondonhasinvestedR2 billion for the recent contract to assemble the next generation of the C-Class. MBSA also produces Mitsubishi’s Triton pick-up range andFUSOtrucks,Mercedes-Benzcommercialvehiclesandbuses,andalsoassemblesFreightlinertrucks,aleadingAmericanbrand.VolkswagenSouthAfrica(VWSA)inUitenhageisthelargestGermaninvestment in South Africa. VWSA recorded a 0,5% increase from 2009 to 19,9% in 2010 in the South African market share. The group also had an impressive 101% increase in production volumes in the last year.

General Motors South Africa (GMSA) which produces the Chevrolet, Isuzu,HummerandCadillacbrandshasinjectedR530milliontobeefupitsproductionfacilityinPortElizabeth.

The Ford Engine PlantmanufacturestheRocam1300/1600enginesforexporttoEurope,India,ChinaandRussiaandalsopowersthelocalIconandFordBantamranges.

Optimal Energy’s Joule, South Africa’s first battery-operated electric carisalsolikelytobebuiltintheprovinceattheEastLondonIndustrialDevelopmentZone(IDZ).

automotive components, raw materials and semi-Finished products

OEMsintheEasternCapesourceasignificantportionofcomponentslocally,supportingamajorindustryofover160automotivecomponentmanufacturers.Localautomotivecomponents companies produce engines and engine components, catalytic converters, leather seats and upholstery, as well as tyres and tubes.

The province has also seen a considerable growth of companies which supply raw materials and semi-finished products required by automotive manufactures. These include chemicals, plastics, industrial textiles and fabrics.

advantages For automotive investors

South Africa has one of the best infrastructure and service industries among developing nations, particularly in roads, telecommunication, harbours, banking systems, insurance and systems and shipping.

TheEastLondonandCoegaIDZsofferworld-classindustrialinfrastructureandincentivesthatmeettheneedsofOEMsandcomponentmanufactures.BothIDZsarepositionedwitheaseofaccesstotheports,airports,roadandrailnetworksinEastLondonandPortElizabeth.

TheEastLondonIDZ’s16haAutomotiveSupplierParkhousesworldrenowned suppliers who currently manufacture components for the local and export market. Component manufacturers currently located attheEastLondonIDZarefirstandsecondtiersuppliersforthecurrentMercedesBenzC-Classproduction.

The216haNelsonMandelaBayLogisticsPark(NMBLP)borderingVWSAinUitenhageisanotherlocationavailabletoautomotivecomponentsuppliers.TheNMBLPismanagedbyCoegaDevelopmentCorporation.

investment incentives

1. Motor Industry Development Programme (MIDP)TheMIDPprovidesastablepolicyfortheautomotiveindustryandfeatures these key elements:• Gradualtariffreductionandanimportrebatecreditfacility• Competitivecomponentsforexport• DutyFreeAllowance• ProductiveAssetAllowance

2. National incentives TheSouthAfricanDepartmentofTradeandIndustry(thedti)supportsinvestment through the provision of several grants and incentives which include:• Accelerateddepreciationoflandandbuildingusedfor manufacturing• AutomotiveProductionDevelopmentPlan:importrebates• CriticalInfrastructureFund:upto30%ofcapitalcost• ExportMarketingandInvestmentAssistance:partial compensation for developing export markets• EnterpriseInvestmentProgramme:non-refundablecashgrant rangingfrom15%to30%ofinvestmentinassetsforlocaland foreign investments in manufacturing, tourism, and textile industries• ForeignInvestmentGrant:uptoZAR10millionforqualifyingprojects• SkillsSupportProgramme:threeyearcashgrantfortraining• StrategicInvestmentProgramme:taxcredit

locally produced south aFrican sales MANUFACTURER 2008 2009 2010GMSA 46,774 26,775 28,507MBSA 22,666 15,410 15,836VWSA 53,675 32,964 43,328Total 123,115 75,149 87,671Source: NAAMSA/RGT, April 2011

locally produced export volumes MANUFACTURER 2008 2009 2010GMSA 8,890 1,695 993MBSA 37,529 31,732 38,904VWSA 39,779 29,027 76,787Total 86,198 62,454 116,684Source: NAAMSA/RGT, April 2011

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