Hidden threat on South African roads

Grey import vehicles are a hidden threat on South Africa’s roads as they don’t meet local standards.

This is according to DataDot Technology South Africa COO Chad Thomson, who told CapeTalk that grey vehicles also threaten the local economy and many jobs in the local motor vehicle manufacturing industry.

He also warned that motorists who spend their hard-earned money on such a vehicle could have it confiscated by local authorities.

Thomson explained that grey imports are vehicles brought to the country illegally, adding that customs and the government must urgently crack down on illegal imports.

“The importing of used vehicles into South Africa is prohibited under the International Trade and Administration Act,” he said.

The only exception is for people returning to South Africa with a car they bought overseas, so long as they are legal residents, permanent residents, or citizens.

According to Thomson, most grey imports in South Africa come from first-world, right-hand-drive countries like Japan. Customers can be easily caught out if they are unaware of what grey vehicles are.

These often don’t meet South African specifications, with their engines and other components, like suspension, being materially different from those of vehicles certified to be driven in the country.

Customers could be in for a nasty surprise when they try to register a grey import in South Africa. As with any used car sold within the country, the process includes completing a roadworthiness test through local authorities.

“You would need to do the roadworthy test. This is where it would be possibly picked up because it is an uncommon model that you’re trying to register,” said Thomson.

“You would then be caught short because you’ve put your hard-earned cash into a vehicle that is now going to be confiscated.”

Thomson said stricter enforcement is required to address the issue, which can be done through relatively simple updates to current import controls and the government regulatory framework.

“It’s not a policing issue. This is a customs and governmental regulatory issue,” he said.

He added that making consumers aware of what grey imports are and the risks associated with purchasing such vehicles is critical to addressing the issue.

“The consumer is unfortunately supporting this process that is happening illegally,” said Thomson.

The National Association of Automobile Manufacturers of South Africa (Naamsa) recently revealed that grey imports cost the revenue service up to R8 billion annually.

This figure has climbed from R3.8 billion in 2020, representing a 110% increase in the space of a few years.

While grey import models in South Africa typically originate from countries like Japan, Kia South Africa CEO Gary Scott says the majority of grey imports enter the country via neighbouring landlocked regions like Botswana, Lesotho, and Eswatini.

It is far more common to bring in used models in these nations.

This method is commonly used to avoid official taxes and duties on new vehicles, resulting in substantial revenue losses for the government estimated at between R5 billion and R8 billion per year.

It is estimated that roughly 30,000 used vehicles illegally enter South Africa each year, which also impacts legitimate dealerships through revenue losses and diluting the market.

According to Naamsa, grey imports to South Africa negatively impact local car market sales and undermine local manufacturing, technological innovation, and job creation. It also aids criminal activity.

It is also estimated that illegally imported second-hand vehicles make up 7.5% of South Africa’s 12.5 million car fleet. This works out to roughly 938,000 vehicles on South Africa’s roads being grey imports.