Why should we settle for inferior and illegal used-car imports?
October 31, 2022
The Scale of the Problem
| "440,000 illegally imported used cars are currently on the roads"
South Africa has become the dumping ground for inferior products for some time and citizens are not aware of the true cost of these substandard items. According to the MD of Kia SA, Gary Scott, an estimated 440,000 illegally imported used cars are currently on the roads in South Africa. These 'Grey Imports' as they are known, are extremely difficult to track and the scale of the problem is seemingly impossible for regulators to control.
The effects on the economy include massive losses in taxes and inferior products being sold to South Africans, posing danger to motorists and further costs for the unknowing automotive consumer. It is clear that more need to be done to protect our markets from the illegal importing of used cars with the help of public regulators. What is more, private interests in the automotive industry need to play their part in creating an integrity-based environment for South African automotive customers.
How did we get to this point?
| "the South African public needs to be aware of the criminal consequences of these illegal grey imports and that they can be confiscated."
Andrew Kirby, the acting president of The National Association of Automobile Manufacturers of South Africa (naamsa), said the grey vehicle imports problem is mainly the result of management and control issues. Kirby said that there used to be organizational structures in place at the ports that the SA Revenue Service (Sars) and the National Regulator for Compulsory Specifications (NRCS) would use to prevent the illegal activity but these had since fallen away. According to Kirby, the South African public needs to be aware of the criminal consequences of these illegal grey imports and that they can be confiscated.
Where to for the SA Motor Industry?
|“If we could stop this trade, it would be like a 13th cheque for the industry,”
Research suggests that there are 2.4 used sales for every new sale and that 304,340 new cars were sold in SA in 2021. If buyers no longer had a supply of grey imports, then a legitimate used-car market would have far more customers, thus creating a stream of revenue and taxes into the local auto economy. Scott, who leads the government-aided Naamsa task force said, “If we could stop this trade, it would be like a 13th cheque for the industry,” speaking at a motor industry conference held at Kyalami.
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