Illegally imported cars – also known as grey vehicles – continue flooding into South Africa despite comprehensive regulatory frameworks intended to limit their entry.
The National Automobile Dealers’ Association (Nada) estimates that the country receives as many as 50,000 new grey vehicles every year.
As a result, local roads are currently home to around half-a-million illegally imported cars.
This is particularly alarming considering there are roughly 13 million vehicles within the country, meaning almost 4% of all cars in South Africa are grey imports.
These vehicles enter the country primarily through two avenues.
First, they are often driven across the border from regions like Botswana, Lesotho, and eSwatini, and simply never leave.
Second, they arrive at one of our ports under the guise of being destined for another African country, and are loaded onto a truck to be transported across the borders.
However, on their way to South Africa’s neighbours they are quietly offloaded at discrete locations, and there they remain.
While they may not sound all that threatening, grey imports can be severely damaging to a country.
Naamsa The Automotive Business Council estimates that grey imports cost the nation as much as R8 billion a year in foregone import duties, licence fees, VAT, and other taxes.
The shortfall contributes to a lack of funding and spending cuts in other critical sectors, which in turn affects the entire populace.
Additionally, they have a direct impact on road users’ safety.
Grey vehicles oftentimes do not conform to local standards as they may lack certain safety features, and things like their engines and suspension are not tuned for South African conditions.
This could make them more susceptible to causing accidents, as well as more dangerous when involved in one.
Unfortunately, grey vehicles have also found their way into the used-car market where they may be purchased by unsuspecting consumers, which presents other major risks.
If you’re pulled over by the police in a grey vehicle – whether you’re aware or unaware of its status – you could get slapped with hefty fines and there is a high likelihood the car will be impounded.
In extreme scenarios, you may even be criminally charged, said IntegriSure insurance brokers.
Moreover, should you be involved in an accident, you may face liability issues even if the incident was not your fault.
If found guilty of consciously purchasing and using the grey vehicle that was involved in the crash, you stand to receive jail time.
IntegriSure further notes that no insurance company in South Africa will cover a grey vehicle, leaving you without protection in cases of accidents or theft.
“Even if a policy is initially granted, it may be invalidated upon discovery of the vehicle’s status at claim stage,” said IntegriSure.
“Without insurance, owners bear the full cost of repairs or loss due to accidents or theft. Additionally, resale value for grey vehicles is significantly lower, leading to financial loss.”
These vehicles do not come with after-sales agreements like a manufacturer’s warranty or service plan, either.
As such, the cost of maintenance and repairs falls on the owner regardless of the age or mileage of the car.
Spare part availability is highly limited, too, further adding to the burden of owning a grey import.
The solution
A spokesperson for Nada told BusinessTech that stricter enforcement is the only way to stymie the flood of grey imports.
South Africa has excellent regulations to restrict the import of used vehicles.
According to the International Trade Administration Commission of South Africa, the importing of vehicles to the country is only allowed under the following circumstances:
- The vehicle was owned by an immigrant in another country prior to getting a permanent residence permit issued by the Department of Home Affairs.
- The vehicle was owned by a returning South African who had it registered in their name for at least six months while employed abroad.
- A physically disabled person requires a specially modified vehicle and can supply relevant supporting documents.
- The imported car is a racing vehicle and the applicant is a national or international racing driver.
- The car is considered a vintage model, being 40 years or older, or is regarded as a collectable.
Should a particular model not satisfy one or more of these conditions, the application for importation will not be considered.
That said, enforcement of these laws, or the lack thereof, remains a problem, particularly at the country’s notoriously porous borders, noted Nada.
“Strengthening oversight at ports of entry, tightening the vehicle registration system, and increasing collaboration between customs, law enforcement, and licensing authorities would significantly curtail the inflow of illegal imports,” said Nada.
“By closing loopholes and reinforcing compliance, South Africa could reclaim substantial revenue lost to this illicit activity and enhance road safety in the process.”
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