Grey vehicle imports a threat to SA’s automotive industry

SA is facing a growing threat to its automotive industry, economy and public safety — grey vehicle imports. While the allure of these vehicles often comes down to their lower prices, the risks they pose are far-reaching, from economic losses and job destruction to serious safety concerns.

With the nation’s automotive sector serving as a driver of employment and GDP, it’s time for consumers, government officials and industry leaders to confront the dangers associated with grey vehicle imports and take steps towards eradicating them.

What are grey vehicle imports?

Grey vehicle imports refer to used vehicles that are brought into SA through unauthorised channels, bypassing official dealership networks and the government’s regulatory frameworks. These vehicles are sold at a lower price than those imported through official means, making them attractive to cost-conscious buyers. However, these savings come at a high cost — both to consumers and the country.

Economic losses: The hidden bill

One of effects of grey vehicle imports is the huge loss of government revenue. In 2022, it was estimated that SA lost about R8bn in taxes due to these illegal imports. This loss stems from the evasion of import duties, VAT and other taxes, which are typically bypassed when vehicles are smuggled or imported illegally.

This shortfall has direct consequences for all South Africans, as it deprives the government of critical funds that could otherwise be invested in infrastructure, education and public services. Grey imports not only undercut authorised dealerships but also reduce the country’s ability to fund development projects.

In addition, these vehicles are sold without warranties and spare parts are not readily available, so while the starting price looks attractive, the end result is that these vehicles are going to leave buyers with no transport and no recourse.

Job destruction in the automotive sector

SA’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.

The growth of grey imports will lead to further job losses across the automotive value chain as fewer vehicles will be sold through official channels​. This effect extends beyond dealerships to ancillary services such as repairs, parts supply and logistics, worsening unemployment in a country already grappling with high joblessness rates.

Public safety at risk

Grey vehicle imports bypass local safety and environmental standards, posing serious risks to drivers and other road users. Vehicles imported through unauthorised channels may lack crucial safety features such as airbags, ABS brakes and proper crash protection, making them dangerous on SA roads. Additionally, they may not meet the country’s emission standards, contributing to environmental degradation.   

The way forward: Reducing grey imports

To protect SA’s economy, jobs and public safety, it is imperative that the country takes decisive steps to eradicate grey vehicle imports. This can be achieved through a combination of:

1. Stricter enforcement: Strengthen border controls, customs operations and penalties for those caught importing or selling grey vehicles.
2. Vehicle authentication: There are laws in SA that require the authentication of used vehicles when purchased or traded by consumers at dealers. Once sold, before licensing takes place, vehicles should be verified through microdot authentication to confirm the vehicle is legitimate and that it was introduced as a new vehicle. The vehicles should also be inspected as they could have had previous accident damage and/or have been rebuilt.

Conclusion: Protecting SA’s future

The eradication of grey vehicle imports is not just about safeguarding the automotive industry — it’s about protecting our country’s economy, public safety and the livelihoods of thousands of workers.

Let’s make the roads safer, support local jobs and stop grey imports getting on our roads.

• Wahl is the CEO of VehicleFacts