Automotive industry wants state aid

David Powels, president of the National Association of Automobile Manufacturers of SA (Naamsa), said yesterday: “We take note, with concern, of the views and comments of Finance Minister Trevor Manuel.”

Manuel said on Sunday the government should not provide stimulus packages without knowing the outcomes: “You cannot have a lottery, with the loudest voice getting the most money. If you are going to give stimulus packages, you must know the outcomes before dishing out the cash.”

The minister also said recommendations such as scrapping allowances, tax incentives or temporary rebates for trade-ins to stimulate demand would not necessarily work in SA.

Reacting to these remarks, Powels said Naamsa, together with the National Association of Automotive Component and Allied Manufacturers (Naacam) and the retail motor industry, would continue to engage the department in the weeks ahead on the increasingly critical state of the industry.

The department, Naamsa and Naacam set up a task team last month with the object of finding concrete measures to help the motor industry, which is battling with plummeting vehicle sales.

Roger Pitot, executive director of Naacam, confirmed Powels's view, saying “we are dealing with the DTI”.

Pitot said if Manuel was referring to the stimulus package, he agreed with him.

He said before taxpayers' money was spent, the outcomes of stimulus packages should be evaluated. He understood that tax incentives and scrapping allowances — two of the stimulus package measures being proposed to boost sagging car sales — were costly to implement. “They must be carefully thought through before being implemented.”

He said he was not sure if Manuel, when referring to stimulus package, also included short term loans.

The stimulus package, Pitot said, was different from what the automotive industry was mainly asking for, namely bridging loans.

National Union of Metalworkers of SA spokesman Mziwakhe Hlangani declined to comment on Manuel's remarks, saying yesterday the union supported any rescue package agreed by all parties including employers, labour and the government.

Source: Business Day

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