The South African motor industry is currently entering a period of transition with regard to local content regulations for motor vehicles. The Motor Industry Development Programme (MIDP), which was initiated by the South African Government in September, 1995, is to be replaced by the Automotive Production and Development Programme (APDP) from January, 2013.
The initial announcement of the upcoming APDP, published in September, 2008, did not disclose any specific provisions for Medium and Heavy Commercial Vehicles of more than 3 500 kg Gross Vehicle Mass (GM). Towards the end of February, 2010, however, the Department of Trade and Industry revealed that a development action plan for the Medium and Heavy Commercial Vehicle sector would follow early in 2011, as a component of its IPAP2 (Industrial Policy Action Plan) umbrella national programme.
At its initial unveiling, no details of the truck and bus plan were announced, with a period of studies and industry consultation lying ahead before the action and business plan components were to be submitted, for approval by government. This was to have been completed in the first quarter of 2011. However, by August this process, which involves five scheduled meetings between government and industry players, has yet to be completed.
However, the possible ramifications of this upcoming incentive programme are sure to be discussed and debated in networking groups and formal conferences and meetings at the Johannesburg Truck and Bus Show, which will be held in conjunction with the 2011
that will take place at Expo Centre, Nasrec, from October 6-16.
Locally built trucks and buses were last regulated by the Local Content Programme (LCP) that was axed in 1994, and which contained extremely stringent requirements for local diesel engine and transmission fitment.
In stark contrast, the current MIDP has exerted a minimal influence on trucks and buses, beyond the imposition of flat rates of import duty. This amounts to 20% for Completely Built Up (CBU) vehicles, and zero duty for Completely Knocked Down (CKD) components, which category also includes Semi-Knocked-Down (SKD) vehicles. Imported Medium/Heavy Commercial Vehicle tyres are subject to 15% duty.
In the absence of any clear indication of the direction that will be taken by the MHCV plan, some speculation on possible areas of intervention can be ventured. It is notable that, even in the absence of substantial incentives, the practice of local assembly of truck and bus chassis has continued during the term of the MIDP. This has been largely driven by the cost inefficiencies of shipping CBU chassis from overseas manufacturing plants.
A recent announcement that Indian manufacturer Tata Motors will utilise its Rosslyn plant for the assembly of medium and heavy commercial vehicles, adds to a long list of companies, including Mercedes-Benz, Hino, UD Trucks, MAN, Volvo, Scania, Isuzu, Navistar, FAW and Powerstar, that carry out local assembly.
Logic dictates that a successful plan should generate the employment of a substantial number of local people, at appropriate skill levels, and require sustainable up-front investment. Hopefully lessons will have been learned from the era when the extremely stringent LCP mandated the compulsory fitment of locally-manufactured Atlantis Diesel Engines and ASTAS transmissions to South African trucks and buses resulted in the world’s most expensive commercial vehicles.
The most appropriate modus operandi would capitalize the cost advantages of importing the more complicated components from the most appropriate global sources, while encouraging the cost-effective local manufacture of generic bulk-purchase items such as tyres, glass and batteries.
Local added-value activities should also include the adaptation of these vehicles for operation in South Africa, and its export hinterland on the African continent.
Ideally, the MHCV plan should seek to create a highly flexible regime that can work efficiently with the relatively small volumes, in global terms, of dissimilar vehicles absorbed by the local market. Assembly of heavier trucks and buses having their own self-supporting ladder frame chassis is very much a “Meccano kit” type of operation requiring only basic tools and very little in the way of complicated equipment or fixtures.
Preparing these units for the marketplace can also be a fairly straightforward exercise, with bodies being fabricated on the chassis, and loading equipment being fitted directly to the chassis. The flexibility to meet diverse transport tasks can be provided by a wide variety of locally-executed chassis variations, including wheelbases.
The elements of a successful MHCV programme could include some, or all, of the following activities, for which local expertise and capacity has been built up over many decades:
Assembly of chassis/cab and bus chassis units from imported SKD or CKD kits.
Local erection of imported KD (Knocked-Down) integral vans and buses.
Modification of standard imported units to meet local dimensional and specification preferences.
Fabrication and fitment of bodywork (trucks, vans, buses, coaches, truck mixers, refuse compactors, tankers, bulk carriers).
Manufacture/assembly and fitment of load handling equipment (e.g. hydraulic platforms, tailgate lifts, cranes, skips, roll-on units).
Fitment and installation on locally-assembled chassis of more complex equipment imported from overseas (e.g. fire fighting, specialized refuse handling, drilling etc.)
Finishing and decoration of complete units with special colours, decals, logos, etc.
The recent emergence of a trend to locally assemble CKD components imported by bus manufacturers such as Marcopolo suggests a further area of endeavour. While South Africa has an established capability to build sophisticated truck superstructures such as refuse compactors, it has not been the local practice to offer these in a range of sizes and capacities other than those for which there is substantial local demand.
This could mean that potential low-volume markets for these specialist vehicles have remained unexploited and underdeveloped. Small mini-compactors and tankers, mounted on MCV-sized chassis for example, are manufactured in countries like Japan which have extremely narrow streets, and these smaller versions could find applications in South Africa, such as for use in densely populated downtown and beachfront flatland areas.
A programme which encourages the importation of specialised goods and passenger bodywork in knocked-down condition could serve the dual benefits of creating additional local employment and opening up new business opportunities.
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