The Department of Trade and Industry (DTI) released draft amendments to the Automotive Investment Scheme (AIS) guidelines. The amended guidelines were open for public comment until 6 December 2013.
The proposed effective date of the revised guidelines is 1 November 2013 and will apply to projects with the start of production date on or after 1 February 2014.
Based on our assessment of the revised draft guidelines the following amendments will be apply:
- The AIS grant percentage has increased from 20% to 25% for component manufacturers and an additional grant of 5% or 10% may be available based on qualifying criteria. Therefore the maximum grant claimable by component manufacturers on their qualifying investment cost will be up to 35% of their total investment value.
- The revised AIS guidelines include competitiveness improvement costs that may be applied for. The objective of this benefit is to enhance the competitiveness of component manufacturers through the improvement of processes, products, quality standards and related skills development through the use of business development services. The grant will be based on the grant percentage that the component manufacturer has been approved for and must be linked to a new or replacement model of a light motor vehicle manufacturer. The grant will be limited to the competitiveness improvement costs incurred up to six months after the start of production date.
- Qualifying costs are as follows:
| Table of Qualifying Activities and Costs | ||
| Focus Areas | Categories | Consulting fees and expenses |
| Process improvement/optimisation | Process improvement | Introducing new improved processes. |
| Product improvements | Product efficiency | The improvement of production techniques Fees for the design of production information systems |
| Conformity assessment | Quality management improvement | Cost of installing or improving quality management systems; |
| Accreditation | Costs for preparations for accreditation and pre-/initial assessment | |
| Information technology systems | Acquisition and deployment of systems | Acquisition of software for production, sales, accounting and human resource management |
- The revised AIS guidelines have not excluded warehousing and other storage outside of the qualifying building as non-qualifying assets.
- The revised AIS guidelines allow for accelerated grant disbursements for component manufacturers, which will now be 40/30/30% instead of 33.3/33.3/33.3%.