Economics
Carmakers in Battle With South Africa Over Support Plan
- International carmakers seek new incentive deal through 2035
- Government’s targets are overambitious, industry body says
Photographer: Kevin Sutherland/Bloomberg
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South Africa is proposing automakers including Toyota Motor Corp., Ford Motor Co. and BMW AG more than double production in return for tax breaks so generous that the companies can ship the cars all the way to Europe.
The auto industry accounts for about 7 percent of South Africa’s gross domestic product and has been one of the few highlights of a period of sluggish economic growth, according to the National Association of Automobile Manufacturers of South Africa. That can be put down to a state-incentive program that expires at the end of 2020, which both the carmakers and Trade and Industry Minister Rob Davies are keen to extend for another 15 years.