Calls intensify for a clampdown on South Africa’s grey imports

The National Automobile Dealers’ Association (NADA) has reiterated a call first made three years ago that a more urgent stance needs to be taken against vehicles illegally imported into South Africa, collectively known as grey imports.

Legal, yet illegal

According to NADA’s information, around 13 million grey imports, mostly from other African countries, are to be present in South Africa.

“There are shocking statistics related to the illegal importation of these illegal vehicle imports such as the fact that 220 000 vehicles brought in through South African ports have never been exported to the neighbouring countries they were intended for.

“A further 214 000 entered South Africa across a border more than 12 months ago and have not returned to their country of registration,” NADA said in a statement.

ALSO READ: Naamsa: Increasing popularity of grey imports a worry

“Used vehicles may not be brought into South Africa for sale, but may be imported via a South African port with the intention of exporting them to a neighbouring country and this is where, it is believed, loopholes are found”.

Regulations need looking into

Often imported from Japan and at a much lower price than vehicles legally sold, NADA states that while strict regulations are in place determining not only the sales of complete vehicles, but also components such as engines, “there is little control over illegal imports that come into the country through a border post”.

“Strict control measures in South Africa supposedly ensure only a limited number of legal import permits for used vehicles are issued annually,” the association said.

“These are for immigrants, residents and nationals returning to South African, specially adapted vehicles for those with physical disabilities, vehicles inherited by South African citizens and nationals as well as vintage and collectors’ cars and racing cars. Except for special cases, left-hand drive cars are not permitted to enter the country”.

It concluded by saying “finding ways of tightening up border controls to fight this illegal practice is not only in the interests of the local automotive industry, but also a legitimate way of increasing income for the fiscus, which is in the national interest”.

Outcry already started

Back in 2020, the National Association of Automobile Manufacturers of South Africa, Naamsa, reported that R3.8-billion per annum was being lost in tax as a result of grey imports.

“Grey imports have a negative impact on the automotive ecosystem because they rob the fiscus of the much needed tax revenue; they hurt job creation; they aid criminal activity; and undermine road safety initiatives,” the association said.

This increased to R8-billion in 2022 Naamsa Vice-President for Retailing for Original Equipment Manufacturers (OEM) and Kia South Africa CEO Gary Scott described as “jaw-dropping” and often as a result of syndicates.

“These are cars that have come into the country through our ports in Durban and are destined for foreign countries but never get there. This is what I call the 13th cheque for our industry, because this represents at least one extra month’s sales of new vehicles being displaced in this country,” Scott said.

Principal BMW and Mini retailing giant, Legacy, has also waded in on the matter, remarking in a statement last month that, “Africa needs to ensure that our market does not become saturated with these vehicles by implementing stronger policies to ensure that imported vehicles are better regulated, and by preventing countries from exporting cars with failing safety standards”.

ALSO READ: ‘Africa not a dumping ground for used EU vehicles’ – Legacy