While South Africa has significant legislation in place to prevent the import and sale of grey imports this practice unfortunately continues to threaten the local automotive industry.

Grey imports are vehicles that are not brought into the country through the official channels and are destined for other African countries but end up remaining here. They can also be vehicles that are fraudulently imported with the intention of evading customs and registered in South Africa illegally.

Grey imports pose numerous challenges and threats to all parties from the Buyer to the vehicle Dealers all the way up stream to the local new vehicle manufacturing industry.

Grey imports are often a different specification and not tuned to run efficiently on our fuel quality. The illegal importation of grey vehicle imports also has had a significant impact on the economy. In 2022, it was estimated that South Africa lost around R8 billion in taxes to these illegal imports. This loss stems from the evasion of import duties, VAT and other taxes, which are typically bypassed when vehicles are imported into South Africa illegally.

Grey imports are sold without warranties, and spare parts are not always readily available. While the initial selling price of grey imports makes them attractive, these reasons and the fact that they will have a much lower resale value and higher general maintenance costs mean that they are not a smart financial decision in both short or long term.

“Reducing the influx of grey imports is a complex problem that can only be solved using proper vehicle authentication,” says Bryden Menday, GM of VehicleFacts.

Grey imports are registered unofficially, and one of the methods of doing this is by cloning a vehicle. Cloning takes various forms and can be as simple as copying a number plate of a similar vehicle to fraudulently cloning a vehicle on the Natis system through the theft of an originals’ control number. Cloning also sees the reuse of vehicle information from vehicles that have been in an accident, where the Natis is more valuable than the salvage, onto grey imports, which creates the impression that the original vehicle is still on the road.

Since 2013, it has been mandatory for all cars sold and produced in South Africa to be equipped with microdots, which are tiny dots that contain unique vehicle identifiers, such as those supplied by DataDot.

Modern vehicles are equipped with vehicle identifiers in the form of numbers stamped onto major components such as the chassis, engine, transmission etc. in a handful of places. However, a vehicle that has been equipped with DataDots contains thousands of vehicle identifiers across the vehicle. This means that with DataDots almost all the components can be traced back to the original vehicle, making the reuse of components and vehicle identifiers sourced from stolen or written off vehicles virtually impossible.

There are laws in South Africa that require the authentication of used vehicles when purchased or traded by consumers through Dealers to protect the Buyers and Sellers of Used Vehicles.

“Before purchase by a Dealer and the necessary change of ownership, vehicles should be verified through Microdot authentication to confirm the vehicle is legitimate and that it was introduced through the correct channels.” says Menday.

VehicleFacts provides the mechanism to inspect vehicles and their Microdot identifiers in order to ensure their authenticity. This gives dealers the tools to ensure that the vehicle they are buying or trading in is not a grey import, is not a stolen vehicle, a cloned vehicle or possibly a written-off vehicle that has been repaired using parts from various other vehicles.

VehicleFacts is also able to offer Dealers a risk analysis of each individual vehicle, which helps to more easily identify vehicles that pose a greater risk, and which should be subjected to a more stringent authentication process.

VehicleFacts aims to reduce the risk of possibly buying a vehicle with an unclear history by giving dealers the tools to authenticate vehicles themselves or to do so via a network of 400 DataDot Centres. Buying a stolen or grey import vehicle poses numerous risks for dealers, including placing their floorplan in jeopardy.

This authentication cost can be recovered by the dealer as it can be included in the on-the-road fees, which are typically added to the sales invoice.

“Utilising DataDots’ as a trustworthy vehicle identifier is the only real way of authenticating vehicles as all other channels and vehicle identifiers available are susceptible to fraudulent practices,” concludes Menday.