Car dealers in hot water, and a new R22 billion airport for Gauteng

Transport Minister Barbara Creecy confirmed that her department is still planning to implement a new tax on vehicle licence disc renewals to generate revenue for the Road Accident Fund (RAF).

The RAF is funded by a levy on fuel sales that generates R50 billion per year; however, it is technically insolvent after years of mismanagement and overspending on litigation.

Creecy argued that a new tax was necessary to offset the adoption of electric vehicles, since they do not use fuel and therefore do not pay the RAF levy.

However, it is currently unclear whether the new tax on licence disc renewals will only apply to EV owners, or all motorists.

In other news, oil prices rose today after a report that the United States may resume military strikes against Iran after next week’s midterms.

Brent Crude climbed to $116 per barrel after the US told several Persian Gulf nations to be prepared for a short, intense campaign, according to Bloomberg.

Market analysts are also awaiting the outcome of the Israeli elections to see whether incumbent Benjamin Netanyahu or opposition leader Gadi Eisenkot will emerge victorious.

The latest polls show that both contenders may fall short of the majority needed, raising questions about another election or the possibility of a coalition government.

5 important things

Five car dealers in hot water: Five car dealers and a used parts dealer have been ordered to refund customers millions of rands after contravening the Consumer Protection Act. The National Consumer Commission welcomed 10 High Court and National Consumer Tribunal rulings, six of which were against automotive suppliers. [TopAuto].

Plan to use taxpayer money to move taxis to electric vehicles: Transport Minister Barbara Creecy said her department is exploring a plan to use the Taxi Recapitalisation Grant to transition the taxi industry to EVs. The Grant is a capital subsidy allocated from the National Revenue Fund, meaning it comes from taxes. While the taxi industry is not exempt from income tax, it operates mainly through cash, making it difficult for SARS to enforce compliance [MyBroadband].

Chery’s most luxurious brand to launch six new cars globally: Luxeed plans to launch six new-energy vehicles globally, including the LLounge minivan, Stormax SUV, and four crossovers. Luxeed was launched in 2023 as a joint venture between Chery and Huawei. [CarNewsChina].

Plan to turn 13 farms into a new R22 billion airport in Gauteng: The developers of the proposed Vaal Aerotropolis are now seeking environmental authorisation to build their new airport south of Johannesburg. Led by the Vaal Aerozone, the project aims to establish a new international terminal and a freight and logistics hub 9km west of the N1 highway near Vanderbijlpark [BusinessTech].

Suzuki to hike prices as profit drops: Maruti Suzuki is planning another round of price hikes to protect its margins after it saw a lower-than-expected quarterly profit, weighed against rising input costs. The Suzuki cars sold in South Africa are produced by Maruti Suzuki in India, though it has not been confirmed whether these price hikes will be applied to export models. [Bloomberg].