The impact of the MIDP on the South African automotive industry.

Abstract

In September 1995, the South African government introduced the Motor Industry Development Programme (MIDP) as a means of making the South African automotive industry a competitive orientated industry. The MIDP over the years has taken account of the international realities facing themotor industry in South Africa with major focus being placed on trade liberalisation, globalisation of markets against the background of rapid technological change, rising customer expectations and markets which were becoming increasingly demanding and fast moving in terms of global trends. But has the core intention of the MIDP, which was to create an internationally competitive, export industry, been lost? The research proposition that the MIDP has lost a bit of ground with regards to focusing on an export-orientated industry is examined in this dissertation. In this respect, the South African automotive industry, with regards to vehicle and component sales both export and imported, industry growth trends, and the point of view from people working within the South African automotive industry, will be analysed to determine the extent to which the MIDP has lost ground on its original intention. The results show that the MIDP has had positive spin offs with regards to vehicle exports since its induction in 1995. The results also show that, due to the MIDP, the South African automotive industry has seen a substantial growth in volumes of imported vehicles and components into the industry and how the increase in imported vehicles and components has affected the domestic market and local content. Anticipation of the findings of the study shows that the notion of higher tariffs or restrictions on imported vehicles and components could improve the local content levels in locally manufactured export and domestic vehicles. Recommendations have been made in this regard.