The Medium and Heavy Commercial Vehicles Automotive Investment Scheme is designed to stimulate a growth path for the Medium and Heavy Commercial- vehicle industry through investment in new and/ or replacement models and components that will result in new jobs or retention of existing jobs and/ or strengthen the automotive value chain.
Guidelines
The Medium and Heavy Commercial Vehicles Automotive Investment Scheme provides a non-taxable cash grant of 20% of the value of qualifying investment in productive assets by medium and heavy commercial vehicles manufacturers, and of 25% of the value of qualifying investment in productive assets by component manufacturers and tooling companies for medium and heavy commercial vehicles. An additional non-taxable cash grant of 5% of the value of qualifying investment in productive assets may be available to projects that meet at least two of the following economic benefit criteria: tooling; R&D in South African-related components of the project; employment creation; strengthening the automotive supply chain; value-addition; and empowerment.
BENEFICIARIES
- Truck manufacturers;
- Bus Chassis manufacturers;
- Component manufacturers, deemed component manufacturers, tooling companies and bus & truck body manufacturers
Criteria
Truck Manufacturers
- An existing or new manufacturer of medium and heavy motor vehicles (trucks) has to comply with the extent of assembly.
- The cab may be imported in an assembled and trimmed condition into South Africa until 31 March 2016.
- 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.
- With effect from 1 April 2016 the amended CKD definition as specified in ITAC Report 419 will apply and projects with a start of production of 1 April 2016 and beyond that do not comply with the revised definition will not be supported.
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″.
- The chassis, engine and transmission must be assembled semi knocked down in South Africa and the hang-on parts (fuel tank, tyres, battery, wheel rims) for the chassis may be imported into South Africa but have to be fitted to the floor pan or chassis frame of the bus within South Africa.
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, 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.
Should you be interested in applying for the business grant, Dream Team Capital can assist you. Contact us today for professional assistance in streamlining your application for the Medium and Heavy Commercial Vehicles Automotive Investment Scheme.
