An analysis of the impact of the first phase of South Africa's motor industry development programme (midp), 1995-2000

The South African motor vehicle industry is an important branch of the local manufacturing sector, contributing significantly to manufacturing value added and employment. Over the last decade, the local industry has undergone a series of policy reforms, and in recent years has increasingly been exposed to globalisation. This article reviews the role of government policy in shaping the industry, and examines the impact of the first phase of the Motor Industry Development Programme on the industry for the period 1995-2000 in respect of domestic production, automotive industry employment, export performance and the automotive trade balance. The article concludes that even though the industry registered strong export growth that contributed to improving the automotive trade deficit, it was deficient in sustaining domestic production and employment levels. The imminent challenge for the local industry's development is to maintain its export growth trajectory in the long term in the absence of costly government protective incentive mechanisms.