Grey vehicle imports are crippling South Africa’s economy, putting your safety at risk, according to Business Tech.
South Africa’s automotive industry faces a growing crisis as grey vehicle imports continue to flood the market. These used vehicles, smuggled through unauthorized channels and outside official dealership networks, are costing the country billions.
At the end of 2024, the National Association of Automobile Manufacturers of South Africa (Naamsa) revealed the staggering impact: grey imports are stripping up to R8 billion annually from government coffers. This marks a dramatic surge from R3.8 billion in 2020 — a shocking 110% increase in just a few years.
This financial haemorrhage stems directly from the evasion of import duties, VAT, and other critical taxes. Without these funds, South Africa loses essential investment in infrastructure, education, and public services — a loss that ultimately hurts every citizen.
Grey imports are a hidden threat to public safety
Beyond the economic devastation, grey vehicle imports bring severe safety risks to unsuspecting South African buyers. DataDot Technology South Africa COO Chad Thomson highlighted the dangers in an interview with CapeTalk, warning that many of these vehicles fail to meet South African safety standards.
“Customers could be in for a nasty surprise when they try registering a grey import in South Africa,” said Thomson. He explained that key components, such as engines and suspension systems, often differ significantly from models officially approved for local roads.
The risk doesn’t stop at mechanical failures. Buyers who unknowingly purchase grey imports face another harsh reality: the government can confiscate these vehicles, leading to the complete loss of their hard-earned money. “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 added.
Half a million illegal vehicles are already on SA roads
The scale of the grey import problem is even worse than most people realize. According to a spokesperson from the National Automobile Dealers’ Association (NADA), an estimated 50,000 illegal vehicles enter South Africa every year. Over the past five years, authorities recorded half a million foreign-registered vehicles operating on local roads.
“These figures are particularly alarming given that the official vehicle parc in South Africa totals approximately 13 million vehicles,” NADA stated. Nearly 4% of all vehicles in South Africa are grey imports — and Naamsa believes the true figure could be even higher, estimating it at 7.5%.
This influx severely undermines the formal vehicle retail market, where dealerships must comply with strict quality, safety, and environmental standards. “They undermine the viability of the formal vehicle retail market,” NADA warned, adding that illegal imports threaten new vehicle sales, service operations, parts supply chains, and ultimately thousands of jobs across the automotive value chain.
Illegal imports threaten SA’s future — But solutions exist
The financial damage doesn’t end with lost tax revenue. Recent estimates reveal that over 220,000 vehicles imported via South African ports never reached their intended destinations in neighboring countries. Alarmingly, 214,000 of those vehicles still have not returned more than a year later, effectively staying illegally in South Africa.
NADA stresses that tightening enforcement holds the key to curbing this crisis. While current regulations technically restrict second-hand imports to specific exemptions — such as returning residents, vintage vehicles, or specially modified cars — poor enforcement leaves the system wide open to abuse.
“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,” the NADA spokesperson said.
SA must act now to save its automotive industry
Addressing the grey import crisis isn’t just about protecting car dealerships — it’s a matter of national economic survival and public safety.
“By closing loopholes and reinforcing compliance, South Africa could reclaim substantial revenue lost to this illicit activity and enhance road safety in the process,” NADA concluded.
The stakes are clear, without immediate action, South Africa risks losing billions more, and putting millions of drivers in danger.
Stay tuned with The South African as Grey vehicle imports are crippling South Africa’s economy.
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