grey import

The term grey import refers to an item that has been imported into a country, legally, but without the agreement of the manufacturer. The term parallel import may also be used. The term usually refers to motor vehicles and motorcycles, which may be imported, either brand new or used, from another country, where they are more readily available and competitively priced. An example of this is the export of used motor vehicles from Japan, where rigorous road tests and high depreciation make such vehicles worth very little after six years. Consequently, it is profitable to export them to other right hand drive (RHD) countries, such as New Zealand, the Republic of Ireland, or Cyprus where they have proved popular with local buyers. Similarly, there are exports of used cars from Germany to countries in Eastern Europe and left hand drive (LHD) markets in West Africa. Understandably, manufacturers and local distributors of cars have not been enthusiastic about this trade, arguing that grey imports can often be inferior to official ones, and in some countries the commercial import of used cars has been banned. In the European Union, competition law attempts to prevent grey imports from other EU countries. 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 VAT. This is facilitated by the fact that, for a small supplement, UK buyers can request a model in RHD when ordering from a dealer in mainland Europe, although dealers may refuse to do this, or charge a premium for RHD. Even when the issue of LHD / RHD does not arise, buyers can still encounter problems. In 1998, Volkswagen was fined by the European Commission for attempting to prevent customers from Germany and Austria from going to Italy to buy VWs at lower prices than in their own countries.

Grey Import

See also