Posted: June 22, 2015
The Launch of the Toyota Quantum Ses’fikle CKD Launch in Prospecton, Durban
Minister Ebrahim Patel
Dr Johan Van Zyl
Toyota Group Executives
Ladies and Gentlemen
It is my pleasure to be present at this very important occasion.
On behalf of the Department of Trade and Industry and the Government of the Republic of South Africa, I would like to congratulate Toyota South Africa Motors, the management team and the staff on this historical moment of unveiling the Toyota Quantum Ses’fikile Complete Knock Down (CKD) plant.
This event takes place at an interesting time in our country when foreign direct investment across a range of manufacturing sectors demonstrates an upward momentum. In the automotive sector alone our industrial policy instruments have supported investments of approximately R24,5 billion since the launch of the Automotive Production and Development Programme (APDP) in January 2013 with further investments expected in the near future.
As government, we want to convey our support to the Toyota South Africa Motor Company on this R476 million project to migrate your production process to CKD. This is a step in the right direction and supports our IPAP 2015 imperative of working with Global Original Equipment Manufacturers (OEMS) to integrate our high potential component manufacturing companies into the OEMs supply chains.
Our industrial policy work is aimed at providing support to the automotive industry towards deepening value-addition and improving the competitiveness of the domestic industry. The minibus industry in South Africa has for long been characterised by Complete Built Units (CBU) imports until 2011 when in partnership with industry and labour we formulated a (Semi Knock Down) SKD programme. This SKD programme was a temporary or bridging policy measure to facilitate the re-establishment of minibus vehicle assembly in South Africa. The support to SKD operations was for the period 2011ending on 30 April 2015. This SKD programme afforded the minibus assembly industry reasonable time to plan their investments for the migration to full Complete Knock Down (CKD) operation.
I am happy today that we have reached that milestone and this event today is testimony of what is possible when we work together in an integrated and solutions based manner.
2012, we established People Carriers Automotive Investment Scheme (P- AIS) as a support measure to the SKD programme and later to the planned CKD programme. P-AIS a sub-component of the Automotive Investment Scheme (AIS), an incentive designed to grow and develop the automotive sector through investment in new or replacement models and components that will increase plant production volumes, sustain employment and strengthen the automotive value chain. The P-AIS provides a non-taxable cash grant of between 20% and 35% of the value of qualifying investment in productive assets approved by the dti.
Since inception in 2012 this support scheme has approved three projects in the mini bus assembly industry to the tune of approximately R158 million supporting 680 direct jobs. We anticipate a growth in both investment and employment with the new CKD dispensation both at mini bus assembly as well as in the supply chain. This intervention is part of broader policy support programme for the industry commonly referred to as the Automotive Production and Development Programme (APDP) that is aimed at creating an environment that will enable the domestic industry to significantly grow production volumes as well as local value addition leading to the creation of additional employment opportunities across the value chain, in line with “Vision 2020 that aims to double of local vehicle production and broadening and deepening of component manufacture by the year 2020”.
Transformation of the economy remains a key challenge in South Africa and our industrialisation path would be a failure if the historically disadvantaged people are not part of this process. We view this sector as one of our real potential agents to changing the status quo. We would engage more closely with industry to establish common ground on transformation including the work on the promotion of Black Industrialists.
In concluding I would like to convey our pleasure at Toyota’s commitment to investing in South Africa. It has been a mutually beneficial relationship thus far and we are confident that this partnership will continue to grow in leaps and bounds to the benefit of all our people.