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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 is sometimes substituted. Car makers and local distributors sometimes regard grey imports as a threat to their network of franchised dealerships, but independent distributors don’t mind since more cars of an odd brand bring in money from service and spare parts. Also, 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. 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. Grey import vehicles circumvent this profit maximization strategy. In some countries, such as Vietnam and Australia, the import of grey-market vehicles has largely been banned. Grey imports are generally used vehicles, although some are new, particularly in Europe where the European Union tacitly approves grey imports from other EU countries. In 1998, the European Commission fined Volkswagen 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, due to higher tax on cars. It is even possible for car buyers in the United Kingdom to buy right-hand drive cars in EU countries with right-hand traffic where left-hand drive cars are the norm. Japanese used vehicle exporting is a large global business, as rigorous road tests and high depreciation make such vehicles worth very little 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, such as New Zealand, the Republic of Ireland, the United Kingdom, Malta, South Africa, Kenya, Zambia, Mozambique, Bangladesh and Cyprus. Some have even been exported to countries such as Peru, Paraguay, Russia, and Burma, where they have proved popular with local buyers despite the fact that these countries drive on the right. In Peru and Paraguay, used cars imported from Japan are converted to left hand drive before being allowed on the roads, the cost of which is offset by the high taxes applied to new cars. There have also been exports of used cars from Singapore, where cars more than ten years old are scrapped or exported. As a result, thousands of these vehicles are exported every year, making Singapore the second largest exporter of used right-hand drive cars after Japan. 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 Vigo, Toyota Fortuner, Mitsubishi L300 Delica, Nissan Navara, Ford Ranger, 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. Similarly, there are exports of left hand drive (LHD) used cars from Germany to countries in Eastern Europe, EU countries and LHD markets in West Africa. Some cars in the United States are sold only as export by insurance companies due to having been stolen and recovered or damaged in other ways. From Wikipedia, the free encyclopedia : Import of new commercial vehicles |
