They can also be vehicles that are fraudulently imported with the intention of evading customs and then registered in South Africa illegally.

Grey imports pose numerous challenges and threats to all parties, from buyers to vehicle dealers, all the way up stream to the vehicle-manufacturing industry.

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

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

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

They are also registered unofficially, and one of the methods of doing this is by cloning vehicles. Cloning takes various forms and can be as simple as copying a number plate of a similar vehicle to fraudulently cloning a vehicle on the National Traffic Information System (Natis) through the theft of an original’s control number.

Cloning also sees the reuse of vehicle information from vehicles that have been in an accidents, using Natis to create the impression that the original vehicle is still on the road.

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

Modern vehicles are equipped with vehicle identifiers in the form of numbers stamped onto major components such as the chassis, engine, transmission and in a handful of places. However, a vehicle that has been equipped with microdots contains thousands of vehicle identifiers across the vehicle. This means that almost all the components can be traced back to the original vehicle.

There are laws in South Africa that require the authentication of used vehicles when purchased or traded by consumers through dealers to protect the buyers and sellers of used vehicles.

“Before being purchased by a dealer and the necessary change of ownership, vehicles should be verified through microdot authentication to confirm that the vehicle is legitimate and that it was introduced through the correct channels,” Bryden says.

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

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

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

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