There’s no denying the allure of affordable used vehicles to cash-strapped South Africans, but grey imports pose an increasing threat to the country's automotive industry, and can potentially be dangerous too, industry experts say.
Grey vehicle imports are used vehicles brought into the country via unauthorised channels, bypassing the government’s regulatory frameworks.
The growth of grey imports poses a threat to jobs across the automotive value chain as fewer vehicles would theoretically be sold through official channels.
It is estimated that around 30,000 grey imports are currently ‘sneaking’ their way into South Africa each year. These mainly come from neighbouring countries like Lesotho and Botswana, where the importation of used vehicles is permitted, former Kia CEO Gary Scott said at the 2024 AutoTrader Dealer Convention.
Craig Wahl, CEO of VehicleFacts Verification Systems, believes it’s time for consumers and industry leaders to confront the dangers associated with grey vehicle imports, given the pivotal role that the motor sector plays as a major driver of employment and GDP.
“South Africa’s automotive industry plays a pivotal role in the economy, contributing to local job creation, industrial growth and technology transfer.
“The influx of Grey vehicle imports undermines this industry by reducing the demand for new and used vehicles sold through authorised dealers.
“As a result, jobs across the sector - including sales, manufacturing, and after-sales services - are at risk,” Wahl said.
These illegal imports also lead to a significant loss in government revenue through the evasion of import duties, VAT and other taxes. Grey imports are said to have cost the country around R8 billion in taxes in 2022.
Although these taxes, and perceived government spending in general for that matter, are no doubt points of contention for many South Africans, shortfalls in the treasury do ultimately deprive the government of funding that could otherwise have been invested in infrastructure or public services.
VehicleFacts recommends stricter enforcement from authorities, including stronger border controls and improved vehicle authentication laws for used vehicles sold in the country. This could include Microdot Authentication before licensing takes place, for instance.
How you can spot a grey import
Being in possession of a grey import could lead to huge fines, or even jail time in extreme cases, while the vehicle in question will be impounded.
Buyers should already be asking for the Microdot certificate when buying a used car as these are mandatory for all new vehicles sold in the country. The vehicle can also be taken to a Microdot fitment centre for verification.
Potential buyers should also be wary of uncommon vehicle models and in the case of more popular vehicles, look out for any suspicious anomalies with the vehicle they’re buying.
For instance if it’s an older Honda Jazz model (pre-2021) that’s registered and badged as a “Fit” or a Mazda2 called a “Demio”, it’s almost certain to be a grey import.
If unsure, ask a motoring expert to help spot any specification differences that could be indicative of an illegally imported vehicle.
There are numerous other steps buyers can take to avoid buying a grey import, according to IntegriSure Brokers.
These include checking the Vehicle Identification Number (VIN) to ensure it matches all documentation, and inspecting the registration papers to ensure that all necessary documentation, including registration certificates and the vehicle’s service history documentation are in place.
Lastly, if the price seems too good to be true, it most probably is.
IOL Motoring