Parity with world prices now exists. This resulted from increased pressure on component suppliers, reduced dealer margins, and extreme competition among assemblers as a result of new entrants to the industry. However, prices for the mid and luxury sector vehicles remain well above world prices. Analysts express concern that the MIDP program has failed to increase output or lower prices in the upper end of the market. The MIDP has failed in its objective to increase employment.
All evidence points to continued employment reduction.
Component manufacturers have also been hit hard by the MIDP's tariff reduction strategy. CBU imports have dramatically reduced demand for locally manufactured components. Exports have done very well under the MIDP, starting from a very low base. Vehicle exports in 1997 were more than R1.5 billion and are projected to rise to about R2.5 billion or 26,000 units in 1998. Industry players have expressed concern that exports are anchored by import duty rebates.