The Motor Industry Development Programme (MIDP) has been fingered by the Competition Commission as one of the main reasons for the comparatively high vehicle prices in South Africa, an issue that Naamsa suggests should be taken up with government instead.
The Motor Industry Development Programme (MIDP) has been fingered by the Competition Commission as one of the main reasons for the comparatively high vehicle prices in South Africa, an issue that Naamsa suggests should be taken up with government instead.
On Tuesday, the Competition Commission said it was still investigating allegations of excessive pricing and the MIDP’s role in car prices.
The programme has come under fire recently, but it has often been lauded as one of the government’s most successful private sector interventions.
The Commission said its analysis to date had indicated that new car prices in South Africa were much higher than in other countries, “possibly mainly” as a result of the MIDP. It argued too that the MIDP’s import duty of about 34 per cent on cars was generally higher than import duties in other countries, and that this pushed up car prices.
However, in releasing the new vehicle sales figures on Thursday, Naamsa said: “The implied criticism by the Competition Commission of the MIDP represents an issue which the Commission should take up with the Department of Trade and Industry and National Treasury – particularly since the MIDP represents a government programme.
“It is clear that there is a significant and growing disconnect between industrial policy and competition policy in South Africa, and this represents an issue which requires urgent attention at the highest level of government.
“The Competition Authorities should be careful not to destabilise an industry which continues to make a major contribution to the South African economy and which has built up a consistent track record of major foreign direct investment in our country,” the statement concluded.
