Government Incentive Programmes
At Hilder Consulting, we assist South African businesses in unlocking access to a wide range of government funding opportunities designed to promote investment, competitiveness, and job creation.
Below is a summary of key incentive programmes administered by the Department of Trade, Industry and Competition (the dtic).
Automotive Investment Scheme (AIS)
The AIS promotes investment and competitiveness within South Africa’s automotive sector.
It provides a cash incentive of 20%–35% of qualifying capital costs for approved projects by motor vehicle, component, or tooling manufacturers.
Funding may cover
New or used machinery and equipment
Building improvements and expansions
Process and product enhancements
Skills development and IT system upgrades
Component makers apply 90–120 days before start of production; vehicle manufacturers 120–180 days before.
How the AIS grant works
The Automotive Investment Scheme (AIS) is a tax-free cash grant for vehicle manufacturers and their component and tooling suppliers. It supports investment in new models, components and production capacity, as long as you keep your workforce.
Who qualifies
Light-vehicle manufacturers (OEMs) registered with ITAC, including hybrid and electric vehicles
Component, deemed-component and tooling manufacturers that supply an OEM
A South African legal entity and tax compliant
B-BBEE Level 1 to 4 for OEMs and Level 1 to 6 for component and tooling makers
A minimum qualifying investment of R50 million for OEMs and R2 million for component makers
Component makers need an OEM contract or letter of intent, plus at least 25% of turnover (or R10 million a year) from OEM supply chains
How much funding is available
25% of qualifying investment for component and tooling manufacturers
20% for vehicle manufacturers
Up to 35% for electric-vehicle component, tooling and battery manufacturers
Up to R2 million for energy-efficiency investments such as solar or UPS systems
A separate scheme (MHCV-AIS) covers truck and bus manufacturers and their suppliers
What the grant covers
New plant, machinery, equipment and tooling, including jigs, dies and moulds
Verified second-hand or refurbished equipment with at least three years of productive life
Owned buildings and building improvements, within set limits
In-plant logistics and manufacturing IT systems
Land, leased buildings, vehicles, office buildings, VAT and connected-party costs are not covered.
Key rules to know before you start
Component and tooling makers apply 90 to 120 days before start of production; vehicle manufacturers 120 to 180 days before.
Your base-year employment (the 12 months before production starts) must be maintained throughout the incentive period.
Claims are due within four months of the end of each claim period.
Assets must be tagged and may be inspected by the dtic's engineers.
How we handle your application
Eligibility check: we confirm your OEM supply relationship, B-BBEE level and investment qualify, and plan the application timing around your start of production.
Application: we prepare the business plan, investment schedule and three-year projections.
Approval: we handle the technical verification and dtic queries until approval.
Claims: we prepare each claim with the asset schedule, employment breakdown and auditor's report.
Frequently asked questions
I make parts, not vehicles. Do I qualify?
Yes, if you have an OEM supply contract or letter of intent and at least 25% of your turnover (or R10 million a year) comes from OEM supply chains.
When must I apply?
Component makers apply 90 to 120 days before start of production, and vehicle manufacturers 120 to 180 days before.
What grant rate will I get?
25% for component and tooling makers (up to 35% for electric-vehicle components) and 20% for vehicle manufacturers. The grant is tax-free.
Is second-hand equipment covered?
Yes, if it is verified, refurbished or upgraded, and has at least three years of productive life left.
What if my headcount drops?
You must maintain base-year employment for the whole incentive period, otherwise the grant is at risk.
Based on the dtic AIS guidelines (2025) and MHCV-AIS guidelines (2023). Approval is at the dtic's discretion and subject to available funds.