Grey import vehicles are new or used motor vehicles and motorcycles legally imported from another country through
channels other than the maker's official distribution system. The synonymous term
parallel import
A parallel import is a non- counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product and are implicated in issues of international trade, ...
is sometimes substituted.
Car makers frequently
arbitrage markets, setting the price according to local market conditions so the same vehicle will have different real prices in different territories. Grey import vehicles circumvent this
profit-maximization strategy. Car makers and local distributors sometimes regard grey imports as a threat to their network of
franchise
Franchise may refer to:
Business and law
* Franchising, a business method that involves licensing of trademarks and methods of doing business to franchisees
* Franchise, a privilege to operate a type of business such as a cable television p ...
d
dealerships
A car dealership, or car dealer, is a business that sells new or used cars, at the retail level, based on a dealership contract with an automaker or its sales subsidiary. Car dealerships also often sell spare parts and automotive mainten ...
, but independent distributors do not since more cars of an odd brand bring in money from service and spare parts.
In order for the arbitrage to work, there must be some means to reduce, eliminate, or reverse whatever savings could be achieved by purchasing the car in the lower-priced territory. Examples of such barriers include regulations preventing import or requiring costly vehicle modifications. In some countries, such as
Vietnam
Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making i ...
, the import of grey-market vehicles has largely been banned.
Overview
![Honda Step WGN front](https://upload.wikimedia.org/wikipedia/commons/b/b2/Honda_Step_WGN_front.JPG)
Grey imports are generally used vehicles, although some are new, particularly in Europe where the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
tacitly approves grey imports from other EU countries. In 1998, the
European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
fined
Volkswagen
Volkswagen (),English: , . abbreviated as VW (), is a German motor vehicle manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. Founded in 1937 by the German Labour Front under the Nazi Party and revived into a global brand post-W ...
for attempting to prevent prospective buyers from Germany and Austria from going to Italy to buy new VWs at lower pre-tax prices; pre-tax price is lower in Italy, as in
Denmark
)
, song = ( en, "King Christian stood by the lofty mast")
, song_type = National and royal anthem
, image_map = EU-Denmark.svg
, map_caption =
, subdivision_type = Sovereign state
, subdivision_name = Kingdom of Denmark
, establish ...
, due to higher tax on cars. It is even possible for car buyers in the United Kingdom to buy
right-hand drive
Left-hand traffic (LHT) and right-hand traffic (RHT) are the practices, in bidirectional traffic, of keeping to the left side or to the right side of the road, respectively. They are fundamental to traffic flow, and are sometimes referred to ...
cars in EU countries with right-hand traffic where left-hand drive cars are the norm.
Japanese used vehicle exporting
Japanese used vehicle exporting is a grey market international trade involving the export of used cars and other vehicles from Japan to other markets around the world since the 1980s.
Despite the high cost of transport, the sale of used cars a ...
is a large global business, as rigorous road tests and high depreciation make such vehicles worth very little (in Japan) after six years, and strict environmental laws make vehicle disposal expensive. Consequently, it is profitable to export them to other countries with
left-hand traffic
Left-hand traffic (LHT) and right-hand traffic (RHT) are the practices, in bidirectional traffic, of keeping to the left side or to the right side of the road, respectively. They are fundamental to traffic flow, and are sometimes referred to ...
, such as
Australia, New Zealand, the Republic of Ireland, the United Kingdom,
Malta
Malta ( , , ), officially the Republic of Malta ( mt, Repubblika ta' Malta ), is an island country in the Mediterranean Sea. It consists of an archipelago, between Italy and Libya, and is often considered a part of Southern Europe. It lies ...
,
South Africa
South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. It is bounded to the south by of coastline that stretch along the Atlantic Ocean, South Atlantic and Indian Oceans; to the ...
,
Kenya
)
, national_anthem = " Ee Mungu Nguvu Yetu"()
, image_map =
, map_caption =
, image_map2 =
, capital = Nairobi
, coordinates =
, largest_city = Nairobi
...
,
Uganda
}), is a landlocked country in East Africa. The country is bordered to the east by Kenya, to the north by South Sudan, to the west by the Democratic Republic of the Congo, to the south-west by Rwanda, and to the south by Tanzania. The sou ...
,
Zambia
Zambia (), officially the Republic of Zambia, is a landlocked country at the crossroads of Central, Southern and East Africa, although it is typically referred to as being in Southern Africa at its most central point. Its neighbours are t ...
,
Mozambique
Mozambique (), officially the Republic of Mozambique ( pt, Moçambique or , ; ny, Mozambiki; sw, Msumbiji; ts, Muzambhiki), is a country located in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi ...
,
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
,
Bangladesh
Bangladesh (}, ), officially the People's Republic of Bangladesh, is a country in South Asia. It is the eighth-most populous country in the world, with a population exceeding 165 million people in an area of . Bangladesh is among the mos ...
and
Cyprus
Cyprus ; tr, Kıbrıs (), officially the Republic of Cyprus,, , lit: Republic of Cyprus is an island country located south of the Anatolian Peninsula in the eastern Mediterranean Sea. Its continental position is disputed; while it is ge ...
. Some have even been exported to countries such as
Peru
, image_flag = Flag of Peru.svg
, image_coat = Escudo nacional del Perú.svg
, other_symbol = Great Seal of the State
, other_symbol_type = National seal
, national_motto = "Firm and Happy f ...
,
Paraguay
Paraguay (; ), officially the Republic of Paraguay ( es, República del Paraguay, links=no; gn, Tavakuairetã Paraguái, links=si), is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to th ...
, Russia, Mongolia, Yemen,
Burma
Myanmar, ; UK pronunciations: US pronunciations incl. . Note: Wikipedia's IPA conventions require indicating /r/ even in British English although only some British English speakers pronounce r at the end of syllables. As John Wells explai ...
,
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
, and the
United Arab Emirates
The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia ( The Middle East). It is located at t ...
, despite the fact that these countries drive on the right. It is actually ''because'' of these vehicles' RHD configuration that many of them are sent to LHD countries in the first place, for use as mail delivery vehicles. Many Japanese market
Jeep Cherokee
The Jeep Cherokee is a line of SUVs manufactured and marketed by Jeep over five generations. Originally marketed as a variant of the Jeep Wagoneer, the Cherokee has evolved from a full-size SUV to one of the first compact SUVs and into its cu ...
s, for example, have found new use with rural mail carriers in the United States.
Thailand is the third largest exporter of brand new and used right-hand drive cars after Japan and Singapore, because of that country's high-volume production of diesel 4x4 vehicles such as the
Toyota Hilux
The , stylized as HiLux and historically as Hi-Lux, is a series of pickup trucks produced and marketed by the Japanese automobile manufacturer Toyota. The majority of these vehicles are sold as pickup truck or cab chassis variants, although the ...
Vigo,
Toyota Fortuner
The Toyota Fortuner, also known as the Toyota SW4, is a mid-size SUV manufactured by the Japanese automaker Toyota since 2004. Built on the Hilux pickup truck platform, it features two/three rows of seats and is available in either rear-whee ...
,
Mitsubishi L200
The is a group of autonomous Japanese multinational companies in a variety of industries.
Founded by Yatarō Iwasaki in 1870, the Mitsubishi Group historically descended from the Mitsubishi zaibatsu, a unified company which existed from 1870 ...
,
Nissan Navara
The Nissan Navara is a nameplate used for Nissan pickup trucks with D21, D22, D40 and D23 model codes. The nameplate has been used in Australia, New Zealand, Central America, South America, Asia, Europe, and South Africa. In North, Central an ...
,
Ford Ranger
Ford Ranger is a nameplate that has been used on multiple model lines of pickup trucks sold by Ford worldwide. The nameplate has been used for distinct model lines of vehicles worldwide since 1982 from the compact and mid-size pickup category. ...
,
Chevy Colorado, and others. The
Toyota Vigo is the most exported vehicle by parallel exporters. Unlike Japanese and Singaporean exports, the majority of Thailand's grey exports are of new vehicles and the market is dominated by two companies. One of them known as Alpha Automobile Co., Ltd. These trucks are also exported many countries include Japan due to Japanese domestic makers no longer officially selling them through authorized dealers there.
Similarly, there are exports of
left hand drive
Left-hand traffic (LHT) and right-hand traffic (RHT) are the practices, in bidirectional traffic, of keeping to the left side or to the right side of the road, respectively. They are fundamental to traffic flow, and are sometimes referred to ...
(LHD) used cars from Germany to countries in
Eastern Europe
Eastern Europe is a subregion of the European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural, and socio-economic connotations. The vast majority of the region is covered by Russia, whic ...
, some EU countries (less likely Spain, Portugal and Greece) and West Africa (especially Ghana and Nigeria, not Senegal and its surrounding countries). Some cars in the United States are sold only as export by insurance companies due to them having been stolen and recovered, or damaged in other ways.
By country
United States
Because the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
and
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
uniquely have not signed onto
United Nations Economic Commission for Europe
The United Nations Economic Commission for Europe (ECE or UNECE) is one of the five regional commissions under the jurisdiction of the United Nations Economic and Social Council. It was established in order to promote economic cooperation and i ...
standards for automobile design (see
World Forum for Harmonization of Vehicle Regulations
The World Forum for Harmonization of Vehicle Regulations is a working party (WP.29) of the Inland Transport Committee (ITC) of the United Nations Economic Commission for Europe (UNECE). Its responsibility is to manage the multilateral Agreements ...
), they use an anomalous set of motor vehicle
safety
Safety is the state of being "safe", the condition of being protected from harm or other danger. Safety can also refer to the control of recognized hazards in order to achieve an acceptable level of risk.
Meanings
There are two slightly dif ...
and
emission regulations.
For the U.S., these are developed and administered by the
National Highway Traffic Safety Administration
The National Highway Traffic Safety Administration (NHTSA ) is an agency of the U.S. federal government, part of the Department of Transportation. It describes its mission as "Save lives, prevent injuries, reduce vehicle-related crashes" rel ...
(NHTSA) and
Environmental Protection Agency (EPA).
They differ significantly in detail from the international
UN Regulations used throughout the rest of the world.
From 1976 to 1988, individual Americans were actually able to obtain cars conforming to
World Forum for Harmonization of Vehicle Regulations
The World Forum for Harmonization of Vehicle Regulations is a working party (WP.29) of the Inland Transport Committee (ITC) of the United Nations Economic Commission for Europe (UNECE). Its responsibility is to manage the multilateral Agreements ...
standards and "convert" them to vehicles compliant with U.S. regulations - this was known as the "grey market," in that it was a legal activity parallel to officially sanctioned manufacturer efforts.
Vehicle manufacturers face considerable expense to type-certify a vehicle for U.S. sale this amount is not widely publicized, but
Automotive News
''Automotive News'' is a weekly newspaper written for the automotive industry, predominantly individuals corresponding with automobile manufacturers and automotive suppliers. Based in Detroit and owned by Crain Communications Inc, ''Automotive ...
cites a 2013 model vehicle where this modification cost
US$
The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
42 million. This cost particularly affects low-volume manufacturers and models, most notably the makers of high end sports cars. However, larger companies such as
Alfa Romeo
Alfa Romeo Automobiles S.p.A. () is an Italian luxury car manufacturer and a subsidiary of Stellantis. The company was founded on 24 June 1910, in Milan, Italy. "Alfa" is an acronym of its founding name, "Anonima Lombarda Fabbrica Automobili." "A ...
and
Peugeot
Peugeot (, , ) is a French brand of automobiles owned by Stellantis.
The family business that preceded the current Peugeot companies was founded in 1810, with a steel foundry that soon started making hand tools and kitchen equipment, and the ...
have also cited costs of "federalizing" their vehicle lineups as a disincentive to re-enter the U.S. market.
During the
Second World War
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
American servicemen stationed in Europe began to experience the benefits of the nimble
British sports cars, and many shipped them home on their return. There were no legal restrictions to this behavior until 1967. Some owners even acted as sales reps for manufacturers who were happy to help, leading to official imports and the British sports car craze in North America. As with future waves of imported cars, this led the
U.S. automakers to respond by introducing home grown models, such as the
Nash-Healey
The Nash-Healey is a three-seat luxury sports car or grand tourer produced from 1951 to 1954. It was marketed by the Nash-Kelvinator conglomerate in North America as a halo car to promote sales of its Nash Motors division.
The car was the resul ...
,
Ford Vega
The Ford Vega was the winning entry in a Ford-sponsored automotive design contest completed in 1953. Only one example was created.
History
GIs returning after serving overseas in the years following World War II were bringing home MGs, Jaguars ...
,
Ford Thunderbird
The Ford Thunderbird (colloquially called the T-Bird) is a personal luxury car produced by Ford from model years 1955 until 1997 and 2002 until 2005 across 11 distinct generations. Introduced as a two-seat convertible, the Thunderbird was pr ...
, and
Chevrolet Corvette
The Chevrolet Corvette is a two-door, two-passenger luxury sports car manufactured and marketed by Chevrolet since 1953. With eight design generations, noted sequentially from C1 to C8, the Corvette is noted for its performance and distinctiv ...
.
Beginning in 1968, U.S. regulations surrounding vehicle importing became harsher, and many vehicles, like the
Mini
The Mini is a small, two-door, four-seat car, developed as ADO15, and produced by the British Motor Corporation (BMC) and its successors, from 1959 through 2000. Minus a brief hiatus, original Minis were built for four decades and sold during ...
, were immediately excluded from the market.
NHTSA and EPA regulations post 1968
criminalize
Criminalization or criminalisation, in criminology, is "the process by which behaviors and individuals are transformed into crime and criminals". Previously legal acts may be transformed into crimes by legislation or judicial decision. However, ...
the possession of a vehicle not meeting U.S. standards.
Exceptions exist for foreign nationals touring the U.S. in their own vehicle and for cars imported for
Show and Display The "Show or Display" rule is a statutory amendment to the United States Federal Motor Vehicle Safety Standards (FMVSS) that allows certain privately imported automobiles to be exempted, if the vehicle in question is deemed to meet a standard of "hi ...
purposes.
Because of the unavailability of certain car models, demand for
grey market
A grey market or dark market (sometimes confused with the similar term " parallel market") is the trade of a commodity through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market pr ...
vehicles arose during the ''
Malaise era
Malaise era is a term describing U.S.-market cars from roughly 1973 to 1983. The U.S. federal government released several mandates to reduce pollution and improve the fuel efficiency and safety of cars in this era, which while successful, ultimat ...
'' in the late 1970s.
Importing them into the US involved modifying or adding certain equipment, such as
headlamp
A headlamp is a lamp attached to the front of a vehicle to illuminate the road ahead. Headlamps are also often called headlights, but in the most precise usage, ''headlamp'' is the term for the device itself and ''headlight'' is the term for ...
s,
sidemarker lights
The lighting system of a motor vehicle consists of lighting and signalling devices mounted to or integrated into the front, rear, sides, and in some cases the top of a motor vehicle. They illuminate the road ahead for the driver and increase th ...
,
bumpers, and a
catalytic converter
A catalytic converter is an vehicle emissions control, exhaust emission control device that converts toxic gases and pollutants in exhaust gas from an internal combustion engine into less-toxic pollutants by catalysis, catalyzing a redox chemic ...
as required by the relevant regulations.
The NHTSA and EPA would review the paperwork and then approve possession of the vehicle.
It was also possible for these agencies to reject the application and order the automobile destroyed or re-exported.
The grey market provided an alternative method for
Americans
Americans are the citizens and nationals of the United States of America.; ; Although direct citizens and nationals make up the majority of Americans, many dual citizens, expatriates, and permanent residents could also legally claim Ame ...
to acquire desirable vehicles, and still obtain certification.
Tens of thousands of cars were imported this way each year during the 1980s.
The vast majority of these imports were by individuals importing just one car.
Many otherwise unavailable vehicles entered the US via the grey market, like the
Citroën CX,
Range Rover Classic
The Range Rover Classic is a 4x4, mid-size Sport utility vehicle series produced from 1969 to 1996 – initially by the Rover (later Land Rover) division of British Leyland, and latterly by the Rover Group.
The first generation of vehicles pro ...
, and
Renault 5 Turbo
The Renault 5 Turbo or R5 Turbo is a sport hatchback automobile launched by the French manufacturer Renault at the Brussels Motor Show in January 1980. The car was primarily designed for rallying, but was also sold in a street version.
A total o ...
.
The grey market was successful enough that it ate significantly into the business of
Mercedes-Benz
Mercedes-Benz (), commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquartere ...
in North America and their dealers.
The corporation launched a successful multi-million-dollar
congressional lobbying effort to stop private importation of vehicles not officially intended for the U.S. market.
An organisation called AICA (Automotive Importers Compliance Association) was formed by importers in California, Florida, New York, Texas, and elsewhere to counter some of these actions by Mercedes lobbyists, but the Motor Vehicle Safety Compliance Act was passed in 1988, effectively ending private import of grey-market vehicles to the United States.
There have been allegations of improper lobbying, but the issue has never been raised in court.
As a result of being practically banned, the grey market declined from 66,900 vehicles in 1985 to 300 vehicles in 1995. It is no longer possible to import a non-U.S. vehicle into the United States as a personal import, with four exceptions, none of which permits Americans to buy recent vehicles not officially available in the United States.
Registered Importer
After 1988, a vehicle not originally built to U.S. specifications can, under certain circumstances be imported through a registered importer or independent commercial importer, who modifies the vehicle to comply with US equipment and safety regulations and then certifies it as compliant, at enormous expense.[ In practice, this avenue is nearly impossible, even for ]Bill Gates
William Henry Gates III (born October 28, 1955) is an American business magnate and philanthropist. He is a co-founder of Microsoft, along with his late childhood friend Paul Allen. During his career at Microsoft, Gates held the positions ...
. Those who import nonconforming motor vehicles sometimes bring in more than one car at a time to spread the substantial cost of the necessary destructive testing In destructive testing (or destructive physical analysis, DPA) tests are carried out to the specimen's failure, in order to understand a specimen's performance or material behavior under different loads. These tests are generally much easier to car ...
, modification, and safety certification. Destructive crash testing is not always needed if the vehicle can be shown to be substantially similar to a model sold in the U.S.
Canadian cars in U.S.
Even Canadian-market vehicles may not meet these requirements. Since Canadian regulations are similar to those in the U.S., an individual can import a vehicle manufactured to Canadian motor vehicle safety standards if the original manufacturer issues a letter stating that the vehicle also conforms to U.S. motor vehicle standards. The decision to issue a compliance letter is solely at the discretion of the manufacturer, even if the vehicle is known to meet U.S. standards. Before issuing a compliance letter, most manufacturers request proof that the owner of the vehicle is a resident of Canada, and that the car was registered and used in Canada for a minimum period. This is done because the manufacturers maintain separate pricing structures for the U.S. and Canadian markets.
25 Year Rule
In 1989, NHTSA granted vehicles over 25 years of age dispensation from the rules it administers, since these are presumed to be collector vehicles. However, there are two exceptions to the rule. One is California, where vehicle emissions requirements make it difficult to register a classic vehicle from overseas. ( California Smog Check is mandated for automobiles 1976 and newer.) In 21 states, mini truck Mini truck, also called a micro-truck, are tiny but practical light truck
Light truck or light-duty truck is a US classification for vehicles with a gross vehicle weight up to and a payload capacity up to 4,000 pounds (1,815 kg). Similar goo ...
s (JDM market kei trucks
A kei truck, kei-class truck, or Japanese mini truck is a mini truck, a tiny but practical pickup truck available in rear-wheel drive or four-wheel drive versions, built to satisfy the Japanese '' keijidōsha'' (軽自動車, "light vehicle") st ...
) of any age can be legally imported and registered as a utility vehicle
A utility vehicle is a vehicle, generally motorized, that is designed to carry out a specific task with more efficacy than a passenger vehicle. It sometimes refers to a small truck with low sides.
Types of utility vehicles
Military light u ...
with on-road use and top speed restrictions varying by state, although states that allow mini trucks to be operated on public roads prohibit their operation on Interstate highways. In 2021, Maine began deregistering third-generation Mitsubishi Delica vans that were legally imported through the dispensation by classifying it as an off-road all-terrain vehicle
An all-terrain vehicle (ATV), also known as a light utility vehicle (LUV), a quad bike, or simply a quad, as defined by the American National Standards Institute (ANSI); is a vehicle that travels on low-pressure tires, with a seat that is stra ...
. Rhode Island
Rhode Island (, like ''road'') is a state in the New England region of the Northeastern United States. It is the smallest U.S. state by area and the seventh-least populous, with slightly fewer than 1.1 million residents as of 2020, but it ...
also deregistered legally imported Kei cars (including non-van models) in October 2021, citing a best practices guideline (non-legally binding) issued by the American Association of Motor Vehicle Administrators The American Association of Motor Vehicle Administrators (AAMVA) is a non-governmental, voluntary, tax-exempt, nonprofit educational association. AAMVA is a private corporation which strives to develop model programs in motor vehicle administration, ...
.
JDM
Some Americans are interested in Japanese domestic market
Japanese domestic market (JDM) refers to Japan's home market for vehicles and vehicle parts.
There is a common misconception that any Japanese branded car is JDM; however, this is not true. Only a vehicle made in Japan specifically to be sold i ...
vehicles, like the Nissan Skyline
The is a brand of automobile originally produced by the Prince Motor Company starting in 1957, and then by Nissan after the two companies merged in 1967. After the merger, the Skyline and its larger counterpart, the Nissan Gloria, were sold i ...
. In 1999, a California company called Motorex had a number of Nissan Skyline R33 GTS25s crash-tested. They submitted their information to NHTSA and petitioned for 1990–1999 GT-Rs and GTSs to be declared eligible for import.
Many Skylines were subsequently imported through Motorex. This lasted until late 2005, when NHTSA learned not all 1990 through 1999 Skyline models would perform identically in crash testing. Motorex had submitted information for only the R33, but had asserted that the data applied to R32, R33, and R34 models. NHTSA determined that only 1996–1998 R33 models have been demonstrated as capable of being modified to meet the federal motor vehicle safety standards, and that only those models are eligible for import. In March 2006, Motorex ceased all imports and Motorex principal Hiroaki "Hiro" Nanahoshi was arrested and held on $1 million bail on financial, kidnapping, and assault charges.
Market demand signals from grey market
Penetrating the market via the grey market first, is a valid market entry strategy
Market is a term used to describe concepts such as:
*Market (economics), system in which parties engage in transactions according to supply and demand
*Market economy
*Marketplace, a physical marketplace or public market
Geography
*Märket, an ...
. The Lamborghini Countach
The Lamborghini Countach () is a rear mid-engine, rear-wheel-drive sports car produced by the Italian automobile manufacturer Lamborghini from 1974 until 1990. It is one of the many exotic designs developed by Italian design house Bertone, w ...
was initially only available as a grey market vehicle (from 1976 to 1985), as were the Range Rover
Range may refer to:
Geography
* Range (geographic), a chain of hills or mountains; a somewhat linear, complex mountainous or hilly area (cordillera, sierra)
** Mountain range, a group of mountains bordered by lowlands
* Range, a term used to ...
and Mercedes-Benz G-Class. These automakers later made US models to meet the demand.
This avenue of vehicle availability was increasingly successful, especially in cases where the US model of a vehicle was less powerful and/or less well equipped than versions available in other markets. For example, Mercedes-Benz
Mercedes-Benz (), commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquartere ...
chose to offer only the sluggish 380SEL model in 1981 to Americans, some of whom wanted the much faster 500SEL available in the rest of the world. BMW had the same issue with their 745i Turbo.
Nissan developed the 2008 Nissan GT-R
The Nissan GT-R (Japanese: 日産・GT-R, ''Nissan GT-R''), is a high-performance sports car and grand tourer produced by Nissan, unveiled in 2007. It is the successor to the Skyline GT-R, a high performance variant of the Nissan Skyline. Alt ...
to meet this market demand in the United States.
As with the earlier ''G-Wagen'' and ''560SEL'', Mercedes-Benz
Mercedes-Benz (), commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquartere ...
was also able to use the grey market to read market signals with the Smart Fortwo, which was imported in this manner in 2004–2006, prior to its official U.S. release in 2007.
Canada
Cars not originally manufactured to Canadian-market specifications may be legally imported once they are 15 or more years old. This has led to the import of many Japanese sports cars such as the Nissan Skyline. The only categorical exception to the 15-year rule is that many – but not all – vehicles manufactured to United States-market specifications can legally be imported into Canada under the compliance modification and inspection program administered by the Registrar of Imported Vehicles The Registrar of Imported Vehicles (RIV) is a program started by Transport Canada, and contracted to Livingston International Inc., to help regulate Canada Motor Vehicle Safety Standards on vehicles being imported from the U.S. into Canada.
The pr ...
. Typically, modifications to meet Canadian standards include the installation of daytime running lights
A daytime running lamp (DRL, also daytime running light) is an automotive lighting and bicycle lighting device on the front of a roadgoing motor vehicle or bicycle, automatically switched on when the vehicle's handbrake has been pulled down, w ...
and tether anchors to permit secure attachment of infant car seats, documentation indicating that any repairs required in response to the original manufacturer's factory recalls are complete, and passenger cars assembled on or after September 1, 2007 are also required to have an immobilization system that meets the CMVSS 114 standard. Labelling of the vehicle to indicate its imported status, to warn that the odometer is counting in miles (as made-for-Canada odometers have used kilometres since 1976) and to translate safety-related warning labels (such as airbag maintenance procedures) is typically also required. Speedometers in US and most Canadian vehicles indicate both miles per hour and km/h, either with dual calibration or with a single set of numbers that can be made to display miles or kilometres at the driver's option, so are usually left unmodified.
In March 2007, Transport Canada
Transport Canada (french: Transports Canada) is the department within the Government of Canada responsible for developing regulations, policies and services of road, rail, marine and air transportation in Canada. It is part of the Transporta ...
initiated proposed rulemaking to change the importation laws such that vehicles not originally manufactured to Canadian-market specifications would be eligible for import only once they are 25 years old, rather than the present 15-year cutoff rule. The main impetus behind this proposal is the significant influx of Japanese-market vehicles in Canada in recent years, particularly in Western provinces such as British Columbia
British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, ...
due to geographical proximity to Asian ports of departure. BC's public auto insurance
Public auto insurance is a government-owned and -operated system of compulsory automobile insurance used in the Canadian provinces of British Columbia, Saskatchewan, Manitoba, and Quebec. It is based on the idea that if motorists are compelled to ...
administrative body, Insurance Corporation of British Columbia
The Insurance Corporation of British Columbia (ICBC) is a provincial Crown corporation in British Columbia providing insurance. ICBC was created in 1973 by the NDP government of Premier Dave Barrett.
By law, any vehicle registered and driven ...
, in 2007 released a report finding that right-hand drive vehicles are involved in 40% more crashes than left-hand drive vehicles in that province.
New Zealand
In the 1980s, New Zealand eased import restrictions, and reduced import tariffs on cars. Consequently, large volumes of used cars from Japan appeared on the local market, at a time when most cars in New Zealand were locally assembled, and expensive compared to other countries, with most used cars available being comparatively old.
Local buyers now had a much wider choice of models, but despite specifications being higher than so-called "NZ New" cars, there were many problems with "clocking" or odometer fraud
Odometer fraud, also referred to as "busting miles" (United States) or "clocking" (UK, Ireland and Canada), is the illegal practice of rolling back odometers to make it appear that vehicles have lower mileage than they actually do. Odometer fraud ...
, with the odometer wound back to display a much lower mileage. Other problems include vehicles damaged in accidents in Japan. This is in contrast to those imported from Australia, for which the history of such vehicles, including write-offs, is readily available from insurance companies.
However, the widespread availability of used Japanese imports prompted official importers to reduce the price of brand new cars, and in 1998, New Zealand became one of the few countries in the world to remove all import tariffs on motor vehicles.
Grey market vehicles comprise a majority of cars in the national fleet. These secondhand imports have achieved 'normal' status and are used and serviced without comment throughout society. A huge industry servicing and supplying parts for these vehicles has developed. After years of trying to stop grey imports the car companies themselves have become involved, importing in competition with their own new models and providing owners with spare part and repair services. Russia and many African countries, albeit not South Africa where second-hand car imports are illegal, import large quantities of secondhand vehicles from Japan and Singapore.
Nevertheless, a great many used vehicles are imported, 94.6 percent of which come from Japan, most of which are Japanese makes. Most of the other makes are German, such as Audi
Audi AG () is a German automotive manufacturer of luxury vehicles headquartered in Ingolstadt, Bavaria, Germany. As a subsidiary of its parent company, the Volkswagen Group, Audi produces vehicles in nine production facilities worldwide.
Th ...
, BMW, Mercedes-Benz
Mercedes-Benz (), commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquartere ...
, Porsche and Volkswagen
Volkswagen (),English: , . abbreviated as VW (), is a German motor vehicle manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. Founded in 1937 by the German Labour Front under the Nazi Party and revived into a global brand post-W ...
. There are a smaller number of United States makes such as Chevrolet and Chrysler, which were built in right hand drive for the Japanese market. Although in heavy decline from 2005, used-vehicle import totals are higher than those of vehicles first registered in New Zealand. In 2006, 123,390 ex-overseas vehicles were registered, compared to 76,804 brand new vehicles.
Used vehicles must, with some exceptions, be right-hand drive, and they must comply with recognised European, Australian, Japanese, or American emission and safety standards, or they are ineligible for import to New Zealand.
In some cases a left-hand drive vehicle can be imported into New Zealand if it meets certain conditions or is a specialized vehicle. Left-hand drive vehicles 20 years or older normally do not have to meet any special requirements but must weigh no more than 3500 kg.
Ireland
Japanese used car importing has been quite common in Ireland
Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
since the 1980s. The imported cars are cheaper than local used cars due to the very low value of used cars in Japan (and to an extent, used products in general), and a much larger range of specifications are available on Japanese models compared to the very limited ranges sold locally even in comparison to the UK, model ranges of Japanese cars can be very limited mostly due to the high vehicle-registration tax and other taxes imposed on new cars sold in Ireland.
For example, the Toyota Corollas sold in the late 1980s up until the late 1990s (E90 and E100 series) were only available in Ireland in one specification level, with few features and only the base 1.3 litre petrol and diesel engines. In Japan, however, 1.5 and 1.6 litre engines were also available, with around 6 different trim levels, options such as sunroofs, central locking and electric windows available on many specs as early as 1989, ABS and driver airbags optional since 1991, four-wheel drive, and performance GT models. Very basic saloons and diesel-engined models with automatic transmissions also appealed to taxi
A taxi, also known as a taxicab or simply a cab, is a type of vehicle for hire with a driver, used by a single passenger or small group of passengers, often for a non-shared ride. A taxicab conveys passengers between locations of their choic ...
drivers.
In more recent years, Japanese imports have become less common with typical family cars, probably due to the great change in the Irish economy over the past 20 years people generally have larger incomes now, and sales in new cars have soared. Imports from Japan has become more of a specialty market now importing of sports models not originally available in Europe such as the Mitsubishi FTO
The Mitsubishi FTO is a front engined, front-wheel drive coupe produced by Mitsubishi Motors between 1994 and 2000. It was originally planned to be exclusively for the Japanese domestic market, although its popularity as a grey market import to th ...
, Toyota Corolla Levin/Toyota Sprinter
The is a compact car manufactured by Toyota as a variant of the Toyota Corolla. Exclusively sold in the Japanese domestic market, the Sprinter was aimed to be sportier than its Corolla sibling, with the Sprinter being sold at the '' Toyota Auto ...
Trueno, Toyota Starlet
The is a subcompact car manufactured by Toyota from 1973 until 1999, replacing the Publica, but retaining the Publica's "P" code and generation numbering. The first generation Starlet was sold as the Publica Starlet in some markets. In Japan ...
Glanza and Honda Integra has become quite popular, and sports cars like the Nissan Skyline GT-R, Toyota Supra
is a sports car and grand tourer manufactured by the Toyota Motor Corporation beginning in 1978. The name " supra" is derived from the Latin prefix, meaning "above", "to surpass" or "go beyond".
The initial four generations of the Supra were ...
and Mazda RX-7
The Mazda RX-7 is a front-engine, rear-wheel-drive, rotary engine-powered sports car that was manufactured and marketed by Mazda from 1978 until 2002 across three generations, all of which made use of a compact, lightweight Wankel rotary engine. ...
are more easily available as imports. Also, small commercial kei car models such as the Daihatsu Midget
The Daihatsu Midget is a single-seater mini-truck, later a microvan/kei truck made by Japanese automaker Daihatsu. Several distinct vehicles have borne the Midget name over the years, but all have had in common a single or two-seat utilitarian ...
II and Nissan S-Cargo are used by some businesses as advertising aids, as they are quite distinctive and eye-catching on the roads in Ireland.
No modifications are required for Japanese imported cars to be registered and driven on the roads in Ireland. One disadvantage is that Japan uses a different FM radio band than everywhere else, so a band expander or a replacement stereo system is required to receive the full FM band used locally. Like all other cars used on public roads in Ireland, Japanese imports have to pass the National Car Test
The National Car Test (Irish: ''An tSeirbhís Náisiúnta Tástála Carranna''; abbreviated NCT) is a roadworthiness test, which all cars in Ireland must undergo. Following a tender process, the Road Safety Authority awarded the National Car T ...
.
Other used imports sold in Ireland are from the UK, the most readily identifiable being those from General Motors, which badges its cars in the UK as Vauxhall
Vauxhall ( ) is a district in South West London, part of the London Borough of Lambeth, England. Vauxhall was part of Surrey until 1889 when the County of London was created. Named after a medieval manor, "Fox Hall", it became well known for ...
s, not as Opels as in Ireland. As of 2007 the number of cars being Imported into the Republic of Ireland from both Northern Ireland and Great Britain is at record high levels due to high new-car taxation in Ireland and the fact that UK cars are of a higher spec than Irish ones. This trend was highlighted by RTÉ in a consumer programme entitled "Highly Recommended".
United Kingdom
In the United Kingdom, many people have chosen to buy new cars in other EU member states, where pre-tax prices are much lower than in the UK, and then import them into their own country, where they only pay the UK's rate of value added tax (VAT). This is especially the case in Northern Ireland
Northern Ireland ( ga, Tuaisceart Éireann ; sco, label= Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is variously described as a country, province or region. Nort ...
, as pre-tax prices in the Republic of Ireland are kept low because of a vehicle registration tax levied on top of VAT. Other UK buyers can also request a model in RHD when ordering from a dealer in continental Europe for a small supplement. Motor dealers in the EU are compelled under EU competition law to supply right-hand drive models at the same price as LHD models should a buyer request it. Strictly speaking, such imports are known as parallel import
A parallel import is a non- counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product and are implicated in issues of international trade, ...
s.
Warranties on new cars bought in an EU member state are valid throughout the EU, meaning that a UK resident who has bought a new car in another member state and then imports it into the UK will be covered by the same warranty. However, whereas UK warranties tend to be for three years, those in other EU countries may be only for one or two.
There are also some Japanese imported cars found in the UK, the most popular being the Mazda Eunos Roadster, Nissan Figaro
The Nissan Figaro is a front-engine, front-wheel drive, two-door, 2+2, fixed-profile convertible manufactured by Nissan for model year 1991, and marketed in Japan at Nissan Cherry Stores.
A total of 20,073 Figaros were produced by Nissan in ...
and as well as performance cars such as Nissan Skyline
The is a brand of automobile originally produced by the Prince Motor Company starting in 1957, and then by Nissan after the two companies merged in 1967. After the merger, the Skyline and its larger counterpart, the Nissan Gloria, were sold i ...
s, Mitsubishi FTO
The Mitsubishi FTO is a front engined, front-wheel drive coupe produced by Mitsubishi Motors between 1994 and 2000. It was originally planned to be exclusively for the Japanese domestic market, although its popularity as a grey market import to th ...
s and highly tuned Subaru Impreza
The is a compact car that has been manufactured by the Japanese automaker Subaru since 1992. It was introduced as a replacement for the Leone, with the predecessor's EA series engines replaced by the new EJ series. It is now in its sixth gene ...
and Toyota Supra
is a sports car and grand tourer manufactured by the Toyota Motor Corporation beginning in 1978. The name " supra" is derived from the Latin prefix, meaning "above", "to surpass" or "go beyond".
The initial four generations of the Supra were ...
variants that were never officially imported into the UK. These cars tend to be cheaper than official UK imports, but often have better Japanese domestic market
Japanese domestic market (JDM) refers to Japan's home market for vehicles and vehicle parts.
There is a common misconception that any Japanese branded car is JDM; however, this is not true. Only a vehicle made in Japan specifically to be sold i ...
specification levels by comparison. The range of Japanese vehicles in the UK is rising all the time as UK customers see the impressive high spec, low-mileage Japanese vehicles on the roads. Each month new models are being imported by dealers and rapidly become popular on the UK market.
Importing a vehicle from outside of the EU may require the vehicle to be subjected to an IVA test if the vehicle is under ten years of age. This test is carried out by the government agency known as the DVSA. If the vehicle is left hand drive this is fairly straightforward to submit an IVA test application and then present the vehicle to the local test station. The vehicle will likely need changes to lighting systems e.g. amber rear indicators, addition of rear foglight and correct UK headlights. If the vehicle being imported is right hand drive then it must be a personal import i.e. owned by yourself for at least 6 months and you are returning to live in the UK permanently having lived outside of the EU for at least 12 months.
Australia
In Australia, the commercial import of used motor vehicles is significantly regulated and restricted by the Department of Infrastructure.
The allowed imports are limited to what are called special and enthusiast vehicles (SEVS), or most cars manufactured before 1 January 1989 (With the introduction of th
Third Edition Australian Design Rules
.
All vehicles imported into Australia must also be listed on the "Register of Approved Vehicles"
Limitations of vehicles manufactured after 1 January 1989 was to ensure compliance with the regulations governing safety of vehicles on Australian Roads that came into force on this date.
Until the present regulations entered force at the start of 2004, cars over 15 years old could be imported, and would need to gain a Vehicle Inspection in Australia (needed for registration transfer in many states anyway) and often safety modifications to ensure that they met with regulations that would have been in force at the time of their manufacture.
To bring a special or enthusiast vehicle into Australia, the importer must either apply to have the car added to the SEVS register, or import a car already listed on the register.
Vehicles can also be imported to Australia under what is known as a "Type Approval", this is generally used by remanufacturing companies who wish to import a vehicle that is commercially sold overseas, and remanufactured for use in Australia. Examples of vehicles such as this are the Chevrolet Camaro
The Chevrolet Camaro is a mid-size American automobile manufactured by Chevrolet, classified as a pony car. It first went on sale on September 29, 1966, for the 1967 model year and was designed to compete with the Ford Mustang. The Camaro ...
, the RAM Family of Trucks, and the Ford F-Series
The Ford F-Series is a series of light-duty trucks marketed and manufactured by Ford Motor Company, Ford since the 1948 model year. Slotted above the Ford Ranger (Americas), Ford Ranger in the Ford truck model range, the F-Series is market ...
.
Grey imports can pose considerable challenges, due to Australia using Left Hand Traffic, as opposed to the more common Right-Hand Traffic.
This means that vehicles produced for compliance in a country that uses Right Hand Traffic would need a number of modifications to be compliant with the Australian Design Rules, these modifications must be compliant with the Vehicle Standards Bulletin 14, primarily the components that relate to Suspension and Steering, and Lighting
Vehicles imported into Australia must be complied by a Registered Automotive Workshop for use on the roads in Australia. This is different to a regular workshop as detailed in the Vehicle Inspection in Australia article, where a regular automotive workshop can be authorised to conduct vehicle safety inspections in most states.
External Territories
Australia's external territories include Christmas Island, the Cocos (Keeling) Islands and Norfolk Island.
You do not need to obtain an approval under the RVS legislation to import a road vehicle into an external Australian territory.
However, you do need to obtain an approval to import a road vehicle into Australia from an Australian external territory.
Russia
In Russia, grey imports, both new and used, comprised, at certain points, up to 80% of all automobile fleets, because of domestic production being unable to meet the market demands, both in numbers and in quality, especially in the early to mid-1990s.
In western Russia, most imports were from Germany, while to the east of the Ural mountains
The Ural Mountains ( ; rus, Ура́льские го́ры, r=Uralskiye gory, p=ʊˈralʲskʲɪjə ˈɡorɨ; ba, Урал тауҙары) or simply the Urals, are a mountain range that runs approximately from north to south through western ...
where the cost of delivery made both the German imports and domestic productions particularly unattractive, a thriving industry of importing used vehicles from Japan developed. Even though Russia is a left hand drive
Left-hand traffic (LHT) and right-hand traffic (RHT) are the practices, in bidirectional traffic, of keeping to the left side or to the right side of the road, respectively. They are fundamental to traffic flow, and are sometimes referred to ...
country, RHD vehicles are nevertheless legal there, provided that some adjustments (e.g. retuning the headlights) are made, but these are cheap and easily done, thus making the cheap and well-built Japanese cars, trucks and tractors (which proved sturdy enough to withstand severe Russian climate, bad roads, often inadequate servicing and questionable quality of fuel/oil) particularly attractive to the customer. In main import centers such as Vladivostok
Vladivostok ( rus, Владивосто́к, a=Владивосток.ogg, p=vɫədʲɪvɐˈstok) is the largest city and the administrative center of Primorsky Krai, Russia. The city is located around the Golden Horn Bay on the Sea of Japan, c ...
and Yuzhno-Sakhalinsk
Yuzhno-Sakhalinsk ( rus, Ю́жно-Сахали́нск, a=Ru-Южно-Сахалинск.ogg, p=ˈjuʐnə səxɐˈlʲinsk, literally "South Sakhalin City") is a city on Sakhalin island, and the administrative center of Sakhalin Oblast, Russia. I ...
a large-scale service and aftermarket industry developed, including parts depots, auction houses, and logistic centers, all geared for servicing and supporting this relentless import drive. The authorities tried to fight this phenomenon to protect the domestic industry, but the effects have so far been mixed. While increasingly stringent technical requirements and stiffer import tariffs had some effect, they only managed to force the locals to import newer and more expensive vehicles, and to invent various quasi-legal ways to circumvent these regulations. Japanese manufacturers themselves have also stepped in, creating local assembly plants that produce new, left hand drive models to try to compete with the grey imports.
South Korean used vehicle imports become highly prominent in Vladivostok, as the solution to save Russian market from sanctions they have caused by the suspension of Japanese used vehicle imports from 2014 onwards.
China
The parallel market has existed to a limited extent in China for several years, especially in port cities Tianjin
Tianjin (; ; Mandarin: ), alternately romanized as Tientsin (), is a municipality and a coastal metropolis in Northern China on the shore of the Bohai Sea. It is one of the nine national central cities in Mainland China, with a total popu ...
and Dalian. The Shanghai
Shanghai (; , , Standard Mandarin pronunciation: ) is one of the four direct-administered municipalities of the People's Republic of China (PRC). The city is located on the southern estuary of the Yangtze River, with the Huangpu River flowin ...
free trade zone has a 'car dealer' where new cars imported from other territories are sold. Due to price arbitrage, these vehicles can be significantly cheaper than the same vehicle available from the official distributor. For example, a Porsche Cayenne
The Porsche Cayenne is a series of mid-size luxury crossover sport utility vehicles manufactured by the German automaker Porsche since 2002 (Type 9PA or E1), with North American sales beginning in 2003. It is the first V8-engined vehicle built b ...
parallel imported from the United States are priced significantly cheaper, sometimes up to CNY 200,000 ($30,000) than the official version sold in Chinese markets due to heavy dealer markups.
Hong Kong
Although Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delta i ...
is a Special administrative Region of China, the cars in Hong Kong are Right Hand Drive
Left-hand traffic (LHT) and right-hand traffic (RHT) are the practices, in bidirectional traffic, of keeping to the left side or to the right side of the road, respectively. They are fundamental to traffic flow, and are sometimes referred to ...
, which in contrast with China. Quite a lot of used cars from Japan are registered in Hong Kong, including both Japanese makes and even European makes, since both Hong Kong and Japan are right hand drive. In addition to used cars from Japan, some new cars are also independently imported too. In order to register the car in Hong Kong, the car must be right hand drive, less than seven years old, gasoline powered, meets Euro VI
The European emission standards are vehicle emission standards for pollution from the use of new land surface vehicles sold in the European Union and EEA member states and the UK, and ships in EU waters. The standards are defined in a ser ...
c emission and noise standards, with E-mark for all glasses, all lamps and safety belts, and an unleaded-fuel restrictor installed (if not present already). For cars over 20 years old, they can be imported as classic cars and do not have to meet Euro VIc emission standards. However, Hong Kong does not accept privacy windows. If a Japanese used car is fitted with privacy windows, it must be converted to AS-2 standard clear glass in order to register in Hong Kong.
Hong Kong does not have import tax for cars, however, the first registration tax is high. And the first registration tax rate is progressive, which means a higher price car will fall into a higher tax bracket. Since the used car values are mostly lower than new cars of the same model, used car can enjoy a lower tax rate due to depreciated car value.
Philippines
In the Philippines, the main source of import grey market vehicles, both passenger and commercial, is Japan. Second is Korea, third is the US via trans-shipments through Japan. Only one port, Port Irene, Cagayan, was open to grey market passenger vehicles between 2008 and 2014. Some dispute over the legality of importation of passenger vehicles arose and led to a Port Irene ban. Currently the Executive Order 418 has been upheld, thus banning the importation of used passenger vehicles into the Philippines.
Commercial vehicles, special purpose vehicles are not under EO 418 and thus are currently being imported into Subic an
Poro Point, San Fernando
Subic sees roughly 1 cargo ship per week, and has many licensed locators. A second port, Poro Point is, as of February 2014, once per month and is solely facilitated by Forerunner Multi-Resources as the licensed locator, and SASTRAD KK in Japan as the sole shipper.
There is a grey-area trade of used mini trucks from Japan flourishing in Cebu. Mini trucks are chopped in Japan, imported as "parts" and are re-assembled by welding chassis parts together. Cheap to buy, they are a staple of small businesses transporting goods.
Japan
In Japan, although the laws against grey import products were strict, and domestic car makers and authorized dealers have to conform the vehicle dimension standards and other various regulations differing from Europe and United States, the laws against grey-imported vehicles are very lax due to absence of import tariffs, and there are some grey imported vehicles that were never officially sold in the Japanese domestic market
Japanese domestic market (JDM) refers to Japan's home market for vehicles and vehicle parts.
There is a common misconception that any Japanese branded car is JDM; however, this is not true. Only a vehicle made in Japan specifically to be sold i ...
. These ranging from small city cars like Toyota Aygo
The Toyota Aygo is a city car ( A-segment) marketed by Toyota mainly in the European market between 2005 and 2021 across two generations. The Aygo was first displayed at the 2005 Geneva International Motor Show. It was built alongside the relat ...
and Smart ForTwo, to sports cars like AC Cobra
The AC Cobra, sold in the United States as the Shelby Cobra and AC Shelby Cobra, is a sports car manufactured by British company AC Cars, with a Ford V8 engine. It was produced intermittently in both the United Kingdom and later the Unite ...
and Chevrolet Camaro
The Chevrolet Camaro is a mid-size American automobile manufactured by Chevrolet, classified as a pony car. It first went on sale on September 29, 1966, for the 1967 model year and was designed to compete with the Ford Mustang. The Camaro ...
, to commercial vehicles and pickup trucks like the Toyota Tundra. Most cars were imported from their country of origin, and a few were converted to RHD, though some were later introduced to authorized dealers due to popular demand.
Some grey market importers have tried to import domestically-made export-only cars, such as the Subaru BRAT
The Subaru BRAT (acronym for “Bi-drive Recreational All-terrain Transporter”) was a light-duty, four-wheel drive coupé utility, version of the Subaru Leone originally introduced in 1977. The BRAT was developed directly from the company's fou ...
and Infiniti FX
The Infiniti QX70, formerly called the Infiniti FX until 2013, is a mid-size luxury crossover SUV produced by the Nissan-owned Infiniti luxury vehicle brand between 2002 and 2017. The FX replaced the QX4 as Infiniti's mid-size SUV. It shares the ...
, back into Japan's grey market. In Japan, the term used to refer to this scene is called , and this mainly applies to Japanese-branded vehicles. Also, due to NOx laws and some other differing regulations, pickup trucks like the Toyota Hilux
The , stylized as HiLux and historically as Hi-Lux, is a series of pickup trucks produced and marketed by the Japanese automobile manufacturer Toyota. The majority of these vehicles are sold as pickup truck or cab chassis variants, although the ...
are no longer officially distributed in the JDM, so importers continue to import foreign-built trucks into Japan.
The concept of Gyakuyunyu is referenced in the music album '' Gyakuyunyū: Kōwankyoku''.
In Japan, foreign cars sold locally have traditionally been LHD, which is regarded as exotic or a status symbol. This even applies to British brands (although cars for the British market have the steering wheel on the right), in part because many have been imported via the US. Many tollbooths in Japan have a special lane for LHD vehicles. However, some US manufacturers have made RHD models for the Japanese market (namely the Ford Taurus and Chevrolet Cavalier), though with limited success; and as continental European brands become more popular, the preference is increasingly for RHD models, many of which are re-exported to countries like New Zealand as grey imports, along with Japanese models.
Sweden
In Sweden, the main source of grey market vehicles is via Germany, which has more liberal laws and better tax deals on new imported cars. Many used cars also come from Germany, which has a bigger domestic market and rigorous roadworthiness tests. There are no age restrictions on imported vehicles, as such.
Thailand
In Thailand, most grey imports are expensive, rare, and/or sports cars. Most are right-hand drive cars from the United Kingdom, Japan, or Hong Kong, though some are brought in from the US (as left-hand drive cars).
Mercedes-Benz Thailand, an authorised distributor, does exist, but many Mercedes-Benz cars are imported and sold by grey importers. As of 2011, Mercedes-Benz Thailand has a new policy of not providing warranty work to grey-market imports.
The new Thai law prohibits the importation of used cars, effective on December 10, 2019.
Trinidad and Tobago
In Trinidad and Tobago
Trinidad and Tobago (, ), officially the Republic of Trinidad and Tobago, is the southernmost island country in the Caribbean. Consisting of the main islands Trinidad and Tobago, and numerous much smaller islands, it is situated south of ...
, nearly all used imports come from Japan, with some vehicles coming from Thailand
Thailand ( ), historically known as Siam () and officially the Kingdom of Thailand, is a country in Southeast Asia, located at the centre of the Indochinese Peninsula, spanning , with a population of almost 70 million. The country is b ...
and Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
. Before February 2016, cars under 6 years old could be legally imported. Since February 2016, no car can be imported and registered if over 4 years old. An import licence is required and most imports are through dealerships. No new importer dealerships are permitted.
Senegal
Grey imports from France are generally being most common in Senegal. There are also grey imports from Spain, especially vehicles formerly being owned by their taxi companies, though some are brought in from Italy or even Belgium.
Slovakia
Grey import in Slovakia
Slovakia (; sk, Slovensko ), officially the Slovak Republic ( sk, Slovenská republika, links=no ), is a landlocked country in Central Europe. It is bordered by Poland to the north, Ukraine to the east, Hungary to the south, Austria to the s ...
exists in some ways. As part of the EU, importing vehicles from member states is not restricted at all, although imported vehicle has to be inspected for origin (VIN number manipulation, possible stolen vehicle legalization)
Main destinations for import are Germany, Austria, Italy, and the Czech Republic.
Imports from non-member EU states are restricted by age. Personal vehicles are restricted to 8 years (from date of first registration to date of customs declaration), and vehicles intended to be used for business are restricted to 5 years. Vehicles imported from non-member states which are not approved for European roads have to pass import inspection, and modified to meet restrictions. For vehicles from the U.S. or Canada it is mandatory to change headlights, or adjust them for the EU bulb pattern, change red rear turn signals to orange ones, separate them from brake wiring, and add fog lights. Importing cars with RHD has been allowed from 20 May 2018, but the headlights and fog lights have to be converted to the continental pattern.
Pakistan
Grey imports in Pakistan do exist; however, it is limited by passenger cars no older than 3 years old and 4x4 jeeps or off-road passenger vehicles no older than 5 years old at the time of arrival in the Port of Entry. There could be a significant saving on luxury cars in Pakistan, as the official dealer channels may be excessive in price, and also the used car markets may also be excessive in price.
The Federal Board of Revenue for Pakistan gives the importer three scenarios which a passenger vehicle could be imported into the country. These scenarios are as follows:
*Personal Baggage scheme
*Transfer of Residence scheme
*Gift scheme
The Pakistan Customs Duty rates of imports, providing that the vehicles (excluding jeeps) meet the age requirements for Pakistan, are shown below:
*Up to 800 CC (other than US$6,600 Asian Makes);
*From 801 CC to 1000 CC US$5,500
*From 1001 CC to 1300 CC US$11,000
*From 1301 CC to 1500 CC US$15,400
*From 1501 CC to 1600 CC US$18,700
*From 1601 CC to 1800 CC US$23,100
In 2018, after years of appealing with the Pakistan Government, the Classic Car Club of Pakistan was delighted to announce that the Pakistan Government has finally allowed the importation of classic vehicles. The Express Tribune of Pakistan reported on the subject by stating;
"...Earlier in the budget announcement for fiscal year 2018–19 at the end of April, the government had said that it would impose a flat duty of $5,000 on the import of vintage or classic cars and jeeps. A formal notification was issued by the FBR on July 3..."
“...The federal government is pleased to exempt vintage or classic cars and jeeps meant for transport of persons on the import thereof from customs duty, regulatory duty, additional customs duty, federal excise duty, sales tax and withholding tax as are in excess of the cumulative amount of US dollars five thousand per unit,” said the FBR notification.
The duties have been exempted in exercise of the powers of the Customs Act 1969, Federal Excise Act 2005 and Sales Tax Act. However, it clarified that vintage or classic cars and jeeps mean old and used automotive vehicles, falling under PCT Code 87.03 of the First Schedule to the Customs Act 1969 (IV of 1969), manufactured prior to January 1, 1968. APP..."
Greece
Grey imports do exist in Greece. However, they are rare, expensive, and are really limited by small and medium vehicles must be new and not more than 15 days old, buses, vans, and heavy vehicles cannot be more than 25 days old, and vehicles have to be left hand drive before arrival in Greece. Vehicles from left hand traffic countries must be at least 3 years old, have to be converted to left hand drive, and must be inspected before arrival.
The majority of grey imported vehicles originate from either Germany, Netherlands and France, and was the most preferred way to purchase a used vehicle until 2020, when the Ministry of Energy and Environment had announced environmental tax measures that:
* Prohibited the import of vehicles that meet Euro III (or lower) standards
* As for Euro IV vehicles, the importer has to pay a fee of €3,000
* As for Euro V vehicles, the importer has to pay a fee of €1,000
* As for Euro VI vehicles, the importer does not pay any environmental fees upon importing
* The only exception from the restrictions above is when an imported vehicle is over 30 years old and intended for historical use only.
Cambodia
Used cars in Cambodia are mainly imported from Taiwan, United States, Russia, Japan, South Korea and the GCC countries (mostly UAE). Used vehicles from Germany and also the Netherlands are rarely imported there due to the lack of port cities and also due to troubled and highly problematic cost of delivery.
Singapore
As of 2019, the Land Transport Authority mandates that vehicles imported into Singaporean soil must be brand new or manufactured at most three years ago.
Armenia
Used cars in Armenia are mainly imported from Japan, Singapore and the United States. There are also used cars from European countries, but they are mostly over 15 years old.
Kyrgyzstan
In Kyrgyzstan, Grey imports of used cars from Japan and the United States are generally most common there. Used cars from European countries are predominantly more than 15 years old, and mostly limited to German car brands.
Suriname
Grey imports from Japan and Singapore are generally being most common there in Suriname. LHD vehicles are also allowed on the road, but importation of LHD vehicles (especially from the US) is prohibited. Used vehicles from the United Kingdom, Republic of Ireland, Australia and New Zealand are rarely imported there.
Most of the privately owned buses are imported from Japan, since they are already RHD. Most state-owned buses, however, are from the US and the doors heve to be repositioned.
Myanmar
In spite of the change to driving on the right, most passenger cars in the country today are RHD, being second-hand vehicles imported from Japan, Thailand, and Singapore. Now, only left hand drive can be imported to Myanmar and the reason behind is that right hand drive cars are unsuitable for Myanmar's road traffic system.
Caribbean
In many Caribbean islands where traffic drives on the left, such as the British Virgin Islands, U.S. Virgin Islands, the Cayman Islands, the Bahamas and Turks and Caicos Islands, most passenger cars are LHD, being imported from the United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
or even Korea
Korea ( ko, 한국, or , ) is a peninsular region in East Asia. Since 1945, it has been divided at or near the 38th parallel, with North Korea (Democratic People's Republic of Korea) comprising its northern half and South Korea (Republic o ...
. Only government cars, buses and vehicles imported from Japan are RHD. The US Virgin Islands
The United States Virgin Islands,. Also called the ''American Virgin Islands'' and the ''U.S. Virgin Islands''. officially the Virgin Islands of the United States, are a group of Caribbean islands and an unincorporated and organized territory ...
(originally a Danish protectorate which drove on the left, as did Denmark until the early 20th century) are particularly notorious for a high accident rate caused by American tourists from the mainland who are unfamiliar with driving on the left in their rental cars – the confusion from which is obviously compounded by using a LHD vehicle.
See also
*Grey market
A grey market or dark market (sometimes confused with the similar term " parallel market") is the trade of a commodity through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market pr ...
*Parallel import
A parallel import is a non- counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product and are implicated in issues of international trade, ...
*Japanese used vehicle exporting
Japanese used vehicle exporting is a grey market international trade involving the export of used cars and other vehicles from Japan to other markets around the world since the 1980s.
Despite the high cost of transport, the sale of used cars a ...
* Katrina car
References
{{DEFAULTSORT:Grey Import Vehicle
Automotive industry
Used car market
de:Grauimport