SA’s motor industry bosses have expressed frustration at the lack of any policy announcements in finance minister Enoch Godongwana’s budget speech. They have good reason.
In October, trade, industry & competition minister Ebrahim Patel said a future motor industry regulatory framework would be outlined by Godongwana. However, a vague sentence that R728.8m had been “allocated to support NEV [new energy vehicle] initiatives” does not a policy make, and the car companies are beginning to panic.
This is evident in the tone of their commentary. Volkswagen SA’s new boss, Martina Biene, said it was a “wasted opportunity”. National Association of Automobile Manufacturers of SA CEO Mikel Mabasa said members were “utterly disappointed”.
The motor industry is regulated via a spider web of production incentives, investment schemes, duties, taxes and export credits, all made more complex by the free trade deal with the EU and how this interacts with local content requirements and rules of origin.
Amid this complexity, local motor bosses must lay out the business case for manufacturing future models at their SA plant to their head office colleagues. Without certainty on what the regulatory structures look like for the different components required to manufacture electric vehicles, it is not possible for them to do this. As our major export markets turn their back on internal combustion, this becomes an existential problem.
The department’s motor desk comprises just six people, where other industries have entire ministries at their disposal. Whatever the blockages, though, the matter is now urgent. Tens of thousands of jobs are at risk, and Patel needs to intervene.
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