South Africa's auto sector, the largest manufacturing industry in the country, is set for a huge boost in investment this year with capital expenditure set to hit more than $600 million dollars.

Spending is forecast to reach 8.2bn rand ($626m) in 2017, up from 6.4bn ($493m) in 2016, according to the The National Association of Automobile Manufacturers of South Africa.

According to international news agency, Reuters the NAAMSA said in a memo dated Feb 7 that the sector's estimated capex was based on details supplied by seven major car makers and data from various sources relevant to Beijing Automotive International Corporation.

The automotive sector is South Africa's largest manufacturing industry, which is also forecasting an slight increase in new vehicles sales this year as economic growth gains pace thanks to commodity price rises and a recovery in farming.

Car manufacturers in South Africa include Ford, Volkswagen, Mercedes Benz SA, Nissan and Toyota, with a combination of kit assembly from around the world and locally produced panels for sale across the African continent.

A number of global vehicle manufacturers had in recent years expanded production and exports from their South African operations on the back of incentives offered in government’s Automotive Production and Development Plan (APDP).

South Africa uses state incentives to attract companies including Nissan, Ford Motor Co. and Volkswagen AG to set up and reinvest in factories in the country. The government program will be extended beyond the current timeframe of 2020, while the production threshold to qualify for benefits fell from 40,000 to 10,000 vehicles a year in 2016. South Africa produces more than 600,000 vehicles a year. according to the National Association of Automobile

Pictured top: one of South Africa's best selling vehicles: the Nissan NP200 'bakkie'. Built by Nissan its Rosslyn plant, near Pretoria. Nissan is owned by French automaker Renault, and the pickup is based on the floorpan of the Romanian Dacia, also owned by Renault.

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