Automotive Investment Scheme (AIS)
The Automotive Investment Scheme (AIS) is 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.
Objectives of incentive scheme
- Strengthen and diversify the sector through investment in a new and/or replacement models and components.
- Increase plant production volumes.
- Sustain employment and/or strengthen the automotive value chain.
- The AIS provides for a taxable cash grant of (20%) of the value of qualifying investment in productive assets as approved by the dti.
- An additional taxable cash grant of 5 or 10% may be available to projects that are found to be strategic by the dti.
- An additional taxable cash grant of five to ten percent (5% – 10%) may be made available for projects that maintain their base year employment figure throughout the incentive period, and achieve at least two (2) of the following economic requirements:
- Research and development in South Africa;
- Employment creation;
- Strengthening of the automotive value chain; and
- Value addition.
- To qualify for an additional grant of five to ten percent (5% – 10%), the project must demonstrate the following:
- In respect of light motor vehicle manufacturer: a specified increase in unit production per plant ; and
- In respect of component manufacturers: a specified increase in turnover and manufacturing of components that are currently not being manufactured in South Africa.
- Light motor vehicle manufacturers that have achieved, or can demonstrate that they will achieve, a minimum of 50 000 annual units of production per plant, within a period of three (3) years; or
- Component or deemed component manufacturers that are part of the Original Equipment Manufacturer (OEM) supply chain; or
- Will achieve at least 25% of total entity turnover or R10 million by the end of the first full year of commercial production as part of a light motor vehicle manufacturer supply chain, locally and / or internationally.
Light Motor Vehicle Manufacturers
- Should have achieved or can demonstrate that it will achieve, within three years, a minimum of 50 000 annual units of production per plant.
- Should demonstrate that it will achieve within three years a minimum of 50 000 annual units of production per plant.
Component Manufacturers or Deemed Component 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 light motor vehicle manufacturer supply chain locally and/or internationally;
- 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 light motor vehicle manufacturer supply chain locally and/or internationally.