This document provides an overview of investment opportunities in the South African automotive industry. It discusses trends in vehicle sales, exports, imports and production and how they relate to economic growth. Investment by automotive companies peaked in 2006 prior to the global economic downturn. The government has introduced a new Automotive Production and Development Programme (APDP) to support the industry and achieve a vision of producing over 1 million vehicles annually by 2020 to drive jobs and localization. The APDP includes import tariffs, a vehicle assembly allowance, production incentives and an automotive investment scheme providing cash grants to support new investments in vehicle assembly and component manufacturing projects. Contact details are provided for inquiries.

1. Automechanica 2011Overview of Investment OpportunitiesJFSTechnology (PTY) LTD

2. Sales , Imports, Exports and Production Investments by OEMsVision 2020Automotive Production and Development ProgrammeContact DetailsAgenda

3. Sales, Exports,Imports,ProductionMarket dependant on GDP growthProduction dependant on Investment growth

4. Sales, Exports,Imports,ProductionMarket nearly doubled in 2006 before global crashProduction exceeded market only 4 times; forecast looks good

5. Sales, Exports,Imports,ProductionImports increase rapidly when economy grows Exports took a decade to catch up with imports

6. Capital Expenditure by OEMsInvestment peaked in 2006 due to platform rationalisation A new OEM will require at least R 5 billion in fixed assets

7. VISION 2020Passenger & Light CVsTo produce over a million vehicles anualyThis is 350 000 more than 2012 forecastGrowth expected mainly from exports Potential for 1 or 2 new OEMsOEM volumes will drive more component localisationNew jobs to be expectedSkills gap challenge

8. Background and Objectives of the APDPThe APDP consists out of 4 pillars that will drive the programme:Import Tariff Protection .Vehicle Assembly Allowance (VAA).Production Incentive (PI). Automotive Investment Scheme (AIS).APDPVehicle Assembly AllowanceProduction IncentiveAutomotive Investment SchemeImport Tariffs 8ProtectionRebates Support

9. Import Tariff ProtectionThe New APDP will have stable, moderate import tariffs from 2012:25% for Completely Built Up Vehicles (CBUs).

10. 18% for CBU’s out of Europe via the EU preferential rate.

11. 20% for CKD components used by vehicle assemblers.FBU Import Duty RateCKD Import Duty RateMIDPMIDPAPDPAPDP

12. Vehicle Assembly Allowance (VAA)The Vehicle Assembly Allowance (VAA) will allow vehicle manufacturers with a plant volume of at least 50,000 units per annum to import a percentage of their components duty free. 20% reducing to 18% over 3 years.

13. Introduction in 2013.MIDPAPDP