Carmakers Balk at S. Africa’s Ambitious Expansion Goals

South Africa wants local carmaking operations to more than double annual output and employment by 2035.

The government is negotiating a 15-year extension of the country’s current Automotive Production and Development Program , which will expire at the end of 2020. Officials propose hefty tax breaks if manufacturers agree to hike annual production to 1.5 million vehicles and increase their combined workforce to 225,000 people, Bloomberg News reports.

But the National Assn. of Automobile Manufacturers of South Africa says those goals are overly ambitious and unlikely to be met without “internationally competitive” levels of support. NAAMSA predicts output by the country’s auto industry will reach 850,000 units in 2020.

South Africa’s carmakers export most of what they make. The country’s local producers are BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota and Volkswagen. Those companies contribute about 7% of South Africa’s gross domestic product.