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South Africa

Comparative analysis of the South African Motor Industry Development Programme (MIDP)

Drawing on its knowledge in analyzing the global automotive industry value chain and devising strategies for developing countries to respond to the challenges of gradual liberalization, UNIDO is assisting the Department of Trade and Industry (DTI) of South Africa in assessing and redesigning the country’s Motor Industry Development Programme (MIDP).
The ultimate objective is to increase the competitiveness of the South African automotive industry through best practices compatible to the World Trade Organization (WTO) Agreement on subsidies and countervailing measures.
This project follows a request from the DTI for UNIDO assistance in the preparation of a comparative study of the automotive industry promotion and support programmes of relevant countries (South Africa, Brazil, India, Thailand and Turkey) and the development outcomes to which these programs have given rise.
The study aims at reviewing the lessons learned in other countries in designing support programmes for the automotive sector that do not contravene WTO rules.
The study will address both direct and indirect support measures and document the level of government at which they are implemented (i.e. federal, state, local). It will also take into account any regional or bilateral trade agreements that might have a bearing on the industry. The study will examine both the positive effects (e.g. on employment generation and productivity growth) of such policies and any negative distortions that may result. Finally it will assess the extent to which other countries’ policies are WTO compatible and, in particular, identify any areas in which the compatibility of commonly used policies is unclear.
The study will inform the revision of the MIDP by assessing the costs and benefits of commonly used support measures and their contribution to the growth of the components industries in the countries under consideration.