Medium and Heavy Commercial Vehicles Automotive Investment Scheme (MHCV-AIS)

Programme Description

MHCV-AIS AND P-AIS NOTICE 01/2018

Automotive Incentive Scheme Interpretation – Note 01/2015

the dtic has initiated the Medium and Heavy Commercial Vehicles Automotive Investment Scheme (MHCV-AIS), a sub-component of the Automotive Investment Scheme (AIS), an incentive designed to grow and develop the automotive sector through investment in new and/or replacement models and components that will increase plant production volumes, sustain employment and/or strengthen the automotive value chain.

The MHCV-AIS provides for a non-taxable cash grant of twenty percent (20%) of the value of qualifying investment in productive assets by medium and heavy commercial vehicle manufactures and twenty five percent (25%) of the value of qualifying investment in productive assets by component manufactures and tooling companies for MHCV’s as approved by the dtic.

Mandatory Conditions

  • The applicant must be a registered legal entity in South Africa in terms of the Companies Act, No. 71 of 2008 (as amended); Companies Act, 1973 (as amended); or the Close Corporations Act, 194 (as amended), and must undertake manufacturing in South Africa.
  • The applicant must be a taxpayer in good standing and must, in this regard, provide a valid tax pin number before the grant is disbursed.
  • The grant will only be applicable to investment in assets that will be used in the entity’s South African operations.
  • The applicant must submit a business plan with a detailed marketing and sales plan, a production plan, budget and projected financial income statement, cash flow statement and balance sheet, for a period of at least three (3) years for the project.
  • The applicant must, in addition to the information supplied in paragraph 5.10, submit an applicable B-BBEE certificate or Sworn Affidavit, ITAC Registration certificate (excluding component/tooling manufacturers), projected financial income statement, cash flow statement and balance sheet for a period of at least three (3) years of the relevant division, cost centre or branch where the project is located, if applicable.
  • Completed applications should reach the offices of the dtic no later than:
    • One hundred and twenty (120) days prior to start of production for medium and heavy commercial vehicle manufacturers; and
    • Ninety (90) days prior to commencement of production for component manufacturers, deemed component manufacturers and /or tooling companies.

Eligibility Criteria

  • Truck Manufacturers
      • An existing or new manufacturer of medium and heavy motor vehicles (trucks) has to comply with the extent of assembly (i.e. C.K.D. definition as specified in Note 5 to Chapter 98.).
      • The engine and transmission, axles, radiators, suspension components, steering mechanisms, braking or electrical equipment and instrumentation may be imported into South Africa but have to be fitted to the floor pan or chassis frame of the truck within South Africa.
      • The body or cab has to be fitted to the floor pan or chassis frame within South Africa.
  • Bus Chassis Manufacturers
      • The chassis, engine and transmission assemblies must comply with the CKD definition of Note 5 as stipulated in Chapter 98 of the Customs and Excise Act”, 1964″.
      • Projects will be required to comply with the amended CKD definition as specified.
      • The projects that do not comply with the revised definition will not be supported under the MHCV-AIS guidelines.
  • Component Manufacturers, Deemed Component Manufacturers, Tooling companies and Bus and Truck Body 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 medium and heavy commercial vehicle manufacturer supply chain locally and/or internationally; and
      • 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 medium and heavy commercial vehicle manufacturer supply chain locally and/or internationally.
      • In the case of Bus Body Manufacturers where the contract is awarded by the entity to the original equipment manufacturer (OEM) to supply the chassis (for example if the Bid to supply busses was awarded to the Body Manufacturer), proof must be provided that the bid has been awarded and a contract has been entered to with the OEM for the supply of the chassis to the Body Manufacturing entity.
  • All applicants must adhere to legislative requirements governing the sector.

Notice pertaining to the processing of personal information

 

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