Proudly sponsored by
Disable this popup on your account page.

Efforts to stop illegal vehicle imports intensify

Sars, auto industry and law enforcement agencies join forces.
If sold legally under a single umbrella the illegal imports would be the third largest brand in SA by volume, says Naamsa. Image: Shutterstock

South Africa’s automotive industry, in conjunction with the SA Revenue Service (Sars), police and law enforcement agencies, is intensifying its efforts to address the scourge of illegally imported vehicles in the country.

National Association of Automobile Manufacturers of South Africa (Naamsa) CEO Mikel Mabasa said an estimated 300 000 of the 12.7 million vehicles on South Africa’s roads are illegally imported vehicles.

Mabasa said Naamsa is deeply concerned about the impact of these grey vehicle imports because they without a doubt displace new car sales.

“To put this into perspective, the monthly average new vehicle market for 2020 is 28 500 units. Grey imports represent an extra month’s sales per annum, which represents 7.5% of the total market and would … [make them] the third largest brand in South Africa by volume,” he said.

Mabasa added that the number of illegal grey vehicle imports in South Africa is growing by 30 000 vehicles a year.

“Based on the suite of taxes applicable to new car sales locally, Naamsa estimates that this is costing the fiscus R3.8 billion a year,” he said.

Read: Manufacturers call for tax changes to boost new vehicle sales

Mabasa said grey vehicle imports have a negative impact on the automotive ecosystem because they rob the fiscus of the much-needed tax revenue, hurt job creation, aid criminal activity, and undermine road safety initiatives.

Confiscate, crush

Sars reported last week that the Inter-Agency Working Group on the Illicit Trade, which includes Sars, the Department of Trade, Industry and Competition (dtic) and other law enforcement agencies had crushed 57 illegally imported second hand vehicles.

Sars Commissioner Edward Kieswetter said the crushing of the illegally imported vehicles is a warning to those who continue to practice this illegal act.

Kieswetter warned unsuspecting buyers to ensure that what they are paying for is legal or their vehicle could be confiscated by the state.

Deputy Minister of Trade and Industry Nomalungelo Gina said the government will stop at nothing when confronting this scourge to protect local manufacturing, which contributes more than 7% to the country’s GDP and is an important employment creator.

“Buyers of these vehicles must realise that they are killing jobs and destroying the capacity of our economy to produce prosperity for all citizens.

“Government is absolutely determined to deal with this blatant disregard of our country’s laws and the safety of road users,” she said.

Sars said the proliferation of second hand motor vehicles into the country from Europe and Asia also poses a safety threat when used within South Africa because these vehicles are not manufactured for the local environment and do not go through proper safety processes, such as roadworthy tests.

The importation of second hand imported vehicles into South Africa is mainly allowed for the purpose of resale to foreign countries, with a few exceptions, such as collectors’ cars.

An import permit from the International Trade Administration Commission (Itac) is required before the vehicles may be imported into South Africa.

However, Itac does not issue permits for the importation of second hand vehicles for use on South African roads, which means a second hand vehicle may not be imported and registered locally.

Sars’ Illicit Trade Unit has intensified its enforcement activities in this area in recent years because of the increase in second hand vehicles in South Africa, resulting in detentions and seizures of illegally imported vehicles that were eventually forfeited to the state.

Vehicle seizures on the up

The clampdown by Sars on illegal second hand vehicle imports resulted in 77 seizures of illegally imported vehicles in 2017/18 but this increased to 169 vehicles in 2018/2019 and to 256 vehicles in 2019/20.

Mabasa said Naamsa’s estimates of the 300 000 illegal vehicles in South Africa and the 30 000 a year increase in these illegal vehicles on the country’s roads is based on data obtained from a company in Durban it has commissioned to do this work on Naamsa’s behalf and on police statistics.

He said the majority of these illegal vehicles entered South Africa through the Port of Durban and were for transhipment to landlocked neighbouring countries such as Botswana, Eswatini (Swaziland) and Lesotho, but never ended up in those countries.

Mabasa said the paperwork for the importation of these vehicles was above board but criminal syndicates have become more sophisticated and intelligent in terms of how they move these vehicles into and out of the country.

Read:

He said the authorities are now scrutinising and double and triple checking all the documentation to be comfortable and ensure the vehicles are in fact destined for neighbouring countries.

Mabasa said the Department of Home Affairs has also established the Border Control Agency.

“We believe this is also going to assist us a lot from a law enforcement point of view to pick up these particular vehicles and to see how best we can manage the issue,” he said.

Mabasa added that the government is talking to all South Africa’s neighbouring states through the Southern African Development Community to escalate and assist with this problem.

AUTHOR PROFILE

COMMENTS   20

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SUBSCRIBE

or create a free account.

Free users can leave 4 comments per month.
Subscribers can leave unlimited comments via our website and app.

Should probably worry more about the illegal vehicle exports….

That actually helps tax revenue as the vehicle you buy to replace the stolen one is simply taxed again. Come on SARS; how about a tax rebate when you replace a stolen vehicle?

Stolen cars leaving the country are very few as compared to stolen cars in the country. Some stolen cars end up back on the dealership floor and refinanced again, chop shops etc.

When 1 stolen car is found at the border, it is headline news for a week but when a chop shop has more than 20 stolen cars in down town joburg, its just ordinary news.

Eddie, your comment re illegal vehicles resulting in lost work opportunities are factually flawed….
We have legislated joblessness in mzanzi, ask you masters

A time will come, where SA will owe China so much in debt….that China will be able to bring in really affordable, and (increasing) quality vehicles with ZERO import duty, to flood the SA market.

The Chinese will ‘request’ 0% import duty, so that no local manufacturer can compete against…and our ANC-govt will have a choice to either say “No” to that, OR have their Chinese loans cut off, ending up with no funds to cover state expenses, like salaries, etc.

…..hence, I’m looking forward to zero import duties from China.

China is the de facto super economic power and about time
No issues with their tech
Zhejiang Geely Holding Group Co., Ltd acquired Volvo and now have decades of pedigree tech engineering to improve on

Indian auto firm Tata acquired Jaguar (Ford Mondeo) and Land Rover. Can finally sort out oil leaks and electrics

Wait until they come for the entire country, your soul, your rights and your access to justice, as their imperialistic objectives mature with their like minded commie buddies the anc and eff!!

At least we are not yet plagued by the illegal importation and sale of used underwear as is vogue in Zimbabwe!

This is like telling someone to stop buying illegal cigarettes as it destroys tax revenue and impacts the profits of the cigarette factory.

How hard can it be to check registration and annual renewal of vehicles against a database of locally manufactured and properly imported VIN?

The safety comment is absurd when the vehicle comes from Europe or Japan. Or do we think a LandCruiser licensed in Japan or Europe is unsafe?

Our taxes hurt sales volumes much more than 8%

The government “concern” about this issue, and that it is a “real problem”, is completely disingenuous.

Many of these cars are direct imports of “second-hand” cars from Japan – which market arises ENTIRELY because of the deliberately punitive costs of vehicle ownership in Japan.

Japan is also a right-hand drive country, and in keeping with the general Japanese culture of looking after their stuff properly, these cars are in an immaculate condition.

In short, imported Japanese cars like these are an absolute bargain. And a vehicle I would personally buy in a heartbeat!

I love all the manufactured local-industry counter-arguments.

Every single one their excuses is vacuous and self-serving, and breaks down under cross-examination. No exceptions!

SA-manufactured vehicles are “safe” and “superior” vehicles because they are specially adapted for SA driving conditions? Not the Nissan Navarro bakkie – which proved to be an absolute death-trap in a recently-conducted crash-test. The UK-manufactured version is superior.

Same death-trap story with the officially-approved Chinese imports.

One need hardly even mention the Ford Kouga fire disaster saga. And the unconscionable and disgraceful attitude and response from the Ford executive and Boardroom on this matter.

These “grey imports” take away jobs and food off the table from the thousands employed in the SA vehicle manufacturing industry?

No more than any existing SA made second-hand vehicle already does!

So it would be logical for Government to support the entirety of ALL local manufacturing industry by completely banning the sales of ALL second-hand goods, and crushing these “illegal” products when found??

One’s mind boggles.

And then there is the old chestnut (when all else fails) of relying on the argument of “lost tax revenues”.

Let’s hit that argument straight on its head…

This is an attempt by industry to gain government assistance to exploit a profitable venture for the mutua enrichment of BOTH these parties. No different from the sly operation of speed trapping companies acting in concert with municipalities. It is NEVER about genuine concerns for road safety. It’s all – and ONLY – about PROFITING from this situation!

It is NOT the function of government to creatively dream up and chase additional methods of burdening the taxpayers with MORE tax to pay.

Indeed, the OBLIGATION of government towards its taxpayers is the very REVERSE. To strive at ALL times to REDUCE its costs to the taxpayers!

In summary, the protests at the “grey imports” is a complete, and disingenuous, scam by a lazy industry that should not be artificially protected from its own inefficiencies.

Capitalist, free-market, rules should apply. Except when it applies to the Capitalists?

Thanks, Jonnox. Worked and lived in a few neighbouring states, and these Japanese imports are all in excellent condition, and now with a more favourable dollar exchange rate also very affordable. The currency of several of our neighbours is directly pegged to the Rand, except Botswana.

“In summary, the protests at the “grey imports” is a complete, and disingenuous, scam by a lazy industry that should not be artificially protected from its own inefficiencies. ”
Not only is this Govt so easily misled by the poor arguments of the local car industry, but both, govt and car manufacturers are also completely led astray by the trade unions.
It is probably more organised labour, and the low productivity, too high wages and poor labour ethics, on the background, that in this case is the real cause of a not very competitive local car manufacturing sector that also benefits of a R 20-25 Billion or more per annum govt support program. Up till 2012 this was called MIDP, Motor Industry Development program, after that the APDP, the Automotive Production and Development Programme. And local car production is assisted by import duties on new imported cars, even higher for EVs, electric vehicles. I believe they are 15 and 20% respectively.
As so often in this country this clueless govt takes major decisions that are not favouring the majority, the consumers, in the longer term but merely serves the interests of smaller pressure and interest groups.
Compare this to the way transport min Mbalaula appears so often taken ransom, in the pocket of the taxi industry.

Preach it. When I was a motoring journalist, I went to one vehicle launch where both the (brand new) vehicles I drove were unroadworthy right out of the box. Cue surprised looks when I wrote an article saying so.

That was 13 years ago and deathtraps with a zero-star NCAP rating are still for sale in SA. For as long that state of affairs persists, NAAMSA has ZERO credibility in any discussion of road safety.

Unsafe grey imports ? Check out what masquerades as ” taxi” on our
roads !

“Illegal vehicle imports”

People read this as importing vehicles being the wrong thing to do.

It should be read as local manufacturers working through government to protect their industry so that they can rip off SA consumers.

That’s what it’s really about.

Unproductive labour and unions are hurting the automotive industry infinitely more than illegal imports.

So interesting how the vultures all suddenly sing from the same book, don’t we ever learn, smuggling always starts when the population is being ripped off e.g cigarettes, cd’s clothing and worst of all the famously extortionist vehicle prices in SA. These actions smell of fear – competition. Suddenly safety is of concern, depending on which spin it either drink&drive, speed, taxi’s and now great reasonably priced used vehicle.

imagine the reaction of the local motor industry if Elon brings Tesla to Mzansi, and undercuts the outrageous prices for vehicles here?Anyway,it’s about time that SA’s most famous business ‘export’ had a presence here

I note quite a few comments above regarding the ripped off SA car buying public / SA manufacturers being inefficient / We pay the high price through new vehicle sales.

And rigthly so!
Local manufacturers are protected by high import duty. New list car prices are becoming ridiculous!

(Protagonists for the local car manuf industry will put forward excuses like the poor ZAR exchange rate, hence we pay so much.)

Fact is, even since apartheid era, South African motoring public are CONDITIONED what price we SHOULD PAY for a car (and is cleverly done through admittedly world-class advertising campaigns. Advertising industry helped to create a ‘car loving’ public, so our buys are emotional/aspirational….so yes, a premium can be asked for that).

Yet, the local car manufacturers will argue…”don’t worry about purchase cost, you can afford it with maximum repayment terms up to 96 months/8 yrs”.
But is this long repayment term normal for the rest of the world’s car buyers?

As Saffas are getting poorer (relatively to rest of world), and new car prices rise disproportionately….the affordability problem get sorted by steadily increasing our downpayment periods. (Back in the mid-90’s I can recall a private car purchase can be financed up to 36mnths max (with 10% dep), and ‘business leases’ up to 48 months without a deposit.)

Fast-forward to today….now we need 96 mnth repayment periods, otherwise we cannot afford our wheels!

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Subscribe to our mailing list

* indicates required
Moneyweb newsletters
INSIDER SUBSCRIPTION APP NEWSLETTERS PODCASTS RADIO / LISTEN LIVE VIDEOS WEBINARS TRENDING

Follow us:

Search articles:
Search JSE companies: