The Automotive Production and Development Programme : an analysis of the opinions of South African stakeholders

Abstract

The development of a specific industry could enhance a country’s economic growth by facilitating its global positioning. Some industries may require government support to enable meaningful economic contribution. The South African government provided support to its automotive industry via the Motor Industry Development Programme (MIDP) since 1995. The MIDP ended in 2012, and is being replaced by the Automotive Production and Development Programme (APDP) from 2013. The APDP will extend support to the South African automotive industry until 2020. The motivation for the extension is to continue providing support to South Africa’s automotive industry in its attempt to become a sustainable global competitor with reduced reliance on government support. This article analyses the opinions of relevant stakeholders on the anticipated performance of the South African automotive industry under the APDP. It was motivated by the fact that there is currently no research available on the anticipated performance of the South African automotive industry under the APDP. It also highlights the link between stakeholders’ opinions and the documented performance of the MIDP as well as the design of the APDP’s policy instruments. Data was gathered by using a survey that was distributed to relevant stakeholders in the South African automotive industry. The results show that where there is policy uncertainty, the perceived risk impacts the opinions of relevant stakeholders. Consequently, there is much uncertainty among participating stakeholders regarding the APDP’s ability to satisfy policy objectives. The majority of stakeholders agreed that the APDP is a World Trade Organization compliant programme and that it will facilitate increased research and development spend. However, there are reservations about the possible negative impact of the APDP’s policy instruments on the South African automotive industry’s exports as well as the future of the local automotive components industry. It is therefore recommended that governments should ensure that policy design is transparent and is finalised and communicated early enough to afford relevant stakeholders sufficient time to respond appropriately.