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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Government policy and the South African motor vehicle industry 1924-1992
Author:Duncan, DavidISNI
Periodical:Politikon: South African Journal of Political Studies
Geographic term:South Africa
Abstract:The development of the South African motor vehicle industry has been heavily dependent on government policy. Yet government policy has largely evolved in reaction to short-term fiscal requirements rather than from a grand vision of an industrialized economy. In the mid-1920s, the government responded to pressure from Ford and General Motors to provide tariff protection for assembly operations by the coast. In the late 1940s, the assembly industry expanded as new producers competed for a slice of the growing South African market. The government reacted to balance of payments losses by introducing import controls in 1948-1949. The Board of Trade and Industry (BTI) rejected the idea of limiting the number of assembly operations and foreign companies were compelled to assemble units in South Africa to ensure their share of import permits. Moreover, the BTI steadily raised local content by weight through the 1960s, 1970s and 1980s. Government policy further contributed to the motor industry's poor performance in the 1980s by necessitating heavy capital investment. Import substitution, inadequate education and training, and uneconomic competition within the industry are among the factors that have led to high retail prices in an overtraded market. In the increasingly hostile world of international automobile production, government policy may have to become proactive rather than reactive. App., ref., sum.