People-carrier Automotive Investment Scheme

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The People-carrier Automotive Investment Scheme (the P-AIS) is a sub-component of the Automotive Investment Scheme (the AIS). The AIS is an incentive designed by the South African government to grow and develop the automotive sector through investment in new and/or replacement models or components that will increase plant production volumes, sustain employment, and/or strengthen the automotive value chain.

The People-carrier Automotive Investment Scheme provides a non-taxable cash grant of between 20 and 35 % of the value of qualifying investment in productive assets approved by the Department of Trade and Industry (the DTI).

Qualifying projects are evaluated on the following economic benefit requirements: tooling; research and development in South Africa; employment creation/retention; strengthening the automotive supply value chain; and empowerment.

The approved P-AIS grant is to be disbursed over a period of three years and grant payment is subject to an evaluation by the DTI to determine whether the project achieved the stipulated performance requirements.

Semi Knocked Down (SKD) Vehicle Assemblers that start production from 01 January 2012 to 31 March 2015 may qualify for a grant of 20 % of the qualifying investment costs. For an additional 5%, the project must demonstrate that the investment will result in base year employment levels being maintained throughout the incentive period and during the model phase out period.

Mono-built motor vehicles for the transport of between 14 and 35 persons, including the driver, and with a vehicle mass exceeding 2000kg, trimmed or untrimmed and painted, but not fitted with engines, transmission assemblies, axles, radiators, suspension components, or braking components.

Complete Knocked Down (CKD) Vehicle Assemblers that start production from 01 January 2012 to 31 March 2015 may qualify for a grant of 25% of the qualifying investment costs. CKD investments that start production from 01 April 2015 onwards, may qualify for a grant of 20% of the qualifying investment costs. For an additional 5%, the project must demonstrate that the investment will result in base year employment levels being maintained throughout the incentive period and during the model phase out period. For a second additional 5% bonus grant (cumulative 10%), the project must meet the set economic benefit criteria.

People-carriers for the transport of between 10 and 35 persons, including the driver, with a vehicle mass exceeding 2000kg. Floor panels, body sides, or roof panels are not permanently attached to each either; the engine and transmission assemblies, axles, radiators, suspension components, steering mechanisms, braking or electrical equipment or instrumentation are not fitted to such floor pans or chassis frames; the bodies/cabs are not fitted to floor pans or chassis frames.

Component manufacturers may qualify for a grant of 25% of the qualifying investment costs. For an additional 5%, the project must demonstrate that the investment will result in base year employment levels being maintained throughout the incentive period and achieve at least two of the set economic benefit requirements.

A component manufacturer that can prove that a contract is in place / a contract has been awarded / a letter of intent has been received for the manufacture of components to supply into the medium and heavy commercial vehicle manufacturer supply value 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 R10 million annually by the end of the first full year of commercial production, as part of automotive (medium and heavy commercial vehicle) manufacturer supply chain locally and/or internationally.

Contact us for assistance with qualifying for the People-carrier Automotive Investment Scheme provided by the DTI.