An estimated 440,000 illegally imported, used cars are travelling regularly on SA roads, costing the exchequer up to R8bn in lost taxes and posing a major risk to road safety, Kia SA MD Gary Scott said on Tuesday.
He blamed slack regulations for the fact that about 55,000 “grey” imports, as they are known, slip into SA each year. That’s more than the number of new vehicles sold every month.
There is not an exact figure for the used-car market because so much of it is informal.
However, based on credit requests and other research, banks estimate that there are 2.4 used sales for every new sale. Last year 304,340 new cars were sold in SA.
“If we could stop this trade, it would be like a 13th cheque for the industry,” he said.
Most buyers, stripped of their grey imports, would move initially into the legitimate used-car market, bringing revenue and taxes into the local system.
Scott, who leads a Naamsa task force working with the government to tackle the problem, was speaking at Kyalami at the start of a four-day motor industry conference.
He said grey imports were partly responsible for a 23% drop in new-vehicle sales in Botswana, Namibia, Lesotho and Eswatini in the past five years. They have been a problem in SA for many years but their numbers are now growing rapidly.
The biggest problem is Durban harbour, where lax oversight allows vehicles supposedly destined for other countries on the continent to slip into SA.
Unlike new vehicles, which arrive mostly in shipping containers, grey imports are driven straight off ships known as ro-ros — short for roll-on, roll-off — and allowed to drive to their cross-border destinations, which they never reach.
Substandard
Most grey imports are dumped from developed markets where there is little demand for used vehicles. They are shipped off to destinations, mainly in Africa, where cheapness is the overriding purchase factor. Many of these vehicles are in dangerous condition.
SA bans used imports except under exceptional circumstances; for example, a resident returning from living overseas may bring their car, collectors may import classic cars, or residents from neighbouring countries may drive into SA for a limited period. There are no such restrictions in most African countries, where grey imports dominate the market.
He added that with the UK and EU planning to ban sales of vehicles with internal combustion engines in the next few years, dumping of old-tech vehicles in Africa was likely to become even more of an issue.
He said that in the past five years, traffic and toll cameras had identified about 550,000 foreign number plates on SA roads. Of those, about 440,000 had been on the road for over a year — the limit for any foreign-registered vehicle to be in SA.
Government attempts to solve the problem had proved inadequate. He equated efforts to reduce the numbers to “trying to empty the ocean with a teaspoon”.
For a start, he proposed closing Durban’s used-car terminal and the relevant bonded warehouses, and transporting vehicles across SA in containers.
He also wanted the department of transport to open its national traffic information system to allow private sector inspection of its database to ascertain a more accurate picture of the situation.
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