MIDP incentives decision hits Aunde

Leather automotive seat manufacturers, Aunde, claim they have been 'severely prejudiced by the South African government's decision to disallow Motor Industry Development Programme (MIDP) incentives on leather seat-cover exports to Australia.' Managing director Siegfried Kuhn says: 'We are the only exporter of automotive leather seat covers as original equipment to Australia. Our future growth could be threatened, as could employment levels. 'The Department of Trade and Industry has not responded to numerous requests for some sort of interim industrial support while the MIDP review is being undertaken.' There are no longer any export incentives under the MIDP on South African leather seats going to Australia. Last year Australia threatened to challenge the MIDP through the World Trade Organisation. This has caused the South African government to carefully consider their long-running programme to grow the local automotive industry. The review is due for conclusion at the end of April. Aunde are the sole supplier of BMW 1-Series leather car seats and have been carrying out an expansion plan to almost double the capacity of their manufacturing facility. According to Kuhn: 'About 90% of Aunde's annual revenue is generated by the leather seat operation, the balance made up of the textile operation which supplies original equipment manufacturers in South Africa. They also supply the majority of leather seats for the BMW 3 and 5-Series worldwide, with Holden and Mitsubishi in Australia as other major clients. Aunde make leather seats, arm and head rests for over 320,000 cars a year, and with the new capacity they will be able to produce leather seats for 3,000 cars a day. According to the International Trade Administration Commission of South Africa figures automotive leather-seat and leather-product exports dropped from R3.7 billion in 2004 to R2.7 billion in 2005. Part of the reason for this is because leather-seat exports to Australia have all but stopped. Australia is South Africa's second-biggest leather-seat export market, although it is much smaller than top ranking Germany.