South Africa is set to attract Chinese investment in its $27 billion automotive industry after President Cyril Ramaphosa signed a tax break for the production of new-energy vehicles into law. Mikel Mabasa, CEO of the Automotive Business Council, stated that three Chinese automakers have already signed non-disclosure agreements with the council, though he declined to reveal their identities. Mabasa expressed optimism that the government policies will attract and retain investment.
The 150% tax deduction on investment in electric and hydrogen-powered vehicle production coincides with Chinese automakers gaining traction in Africa's largest car market. Chery Automobile Co. and Great Wall Motor Co. vehicles are increasingly competing with those from local manufacturing units of established carmakers like Toyota Motor Corp. and Volkswagen AG. In December, Chinese ambassador to South Africa Wu Peng encouraged Chinese automakers to invest in the country. While the industry welcomes this move, it comes after years of warnings that South Africa's car manufacturing industry, a vital part of its manufacturing sector, is at risk due to legislation in its largest export market, the European Union, aimed at phasing out the use of internal-combustion engines. The tax amendment, initially proposed in the national budget in February 2022, was only enacted by President Ramaphosa on December 24th. Although some companies, including Ford Motor Co. and BMW AG, make or plan to manufacture hybrids in the country, none have announced investment in battery-electric vehicles. Local heads of Volkswagen and Isuzu Motors Ltd. have expressed skepticism about their companies producing EVs in South Africa. Stellantis NV stated its intention to do so once the operating environment becomes more favorable
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Source: SABC News Online - 🏆 32. / 51 Read more »