Why aren’t South Africans allowed to import a second-hand vehicle for personal use? If you can find a foreign 4×4 at a good price, why shouldn’t you be allowed to bring it into the country? The reasons are rather murky…
For the past two months a debate has been going on in the letters section of this magazine.
It started innocently enough with a few questions raised by two readers in the November 2013 edition. Willem Fourie questioned the value of the legislation protecting local manufacturers at the expense of South African taxpayers, while Robert Pegg wondered why South Africans weren’t allowed to import a second-hand car for personal use.
These are two pertinent questions for which the government has good, solid answers, but before we get to that, let’s take a look at the manufacturing and sales figures for SA and the legislation supposedly protecting them.
The local manufacturers exported a total of 275 822 vehicles (cars, LCVs, trucks and buses) during 2013 – the third highest on record. The National Association of Automobile Manufacturers of SA (Naamsa) predicts this total will exceed 331 000 during 2014, increasing to 381 000 in 2015. This is definitely a few steps closer to the goal of an annual domestic vehicle production figure of close to a million units per annum by 2020. These suggested figures are mostly dependent on the assumption of further improvement in the global economy and projected higher exports to African countries, Asia and North America.
As a figure for imported versus locally built cars sold in SA during 2013 isn’t available yet, we have to rely on the 2012 numbers. As Johan Kleynhans, Nissan SA’s director: marketing and aftersales, said in his response to Robert Pegg’s letter, “During calendar year 2012 a total of 521 000 new vehicles, passenger and light commercial vehicles were sold in SA. This consisted of 247 000 locally produced vehicles and 274 000 imported vehicles.”
It seems the majority of vehicles sold in SA are imported, so what’s keeping the average private individual from removing the dealership/manufacturer from the process and simply doing it himself?
Simply put, there’s a wall of outdated legislation standing in the way.
It’s illegal to import a car from another country, unless you’re an immigrant and you want to import your personal car, or a South African national returning home after an absence of no less than six months spent working, studying, or researching. In this case a person is limited to three cars per person with a valid licence and he is required to keep the car for at least two years after returning.
Permits are also issued for vehicles designed for the physically disabled, or a person to whom a car was bequeathed in someone’s will. Even in the latter situation, a person isn’t allowed to sell the vehicle for two years.
The only instance in which the average South African can import a vehicle without having lived in the country he/she is importing it from is if the car can be classified as a vintage or collector’s vehicle.
A vintage vehicle is one that is 40 years old or older, but collector’s items are less easy to define. A car has to be declared a collector’s item internationally before it is considered a collector’s item in SA, and even then it needs a stamp of approval from the South African Veteran and Vintage Vehicles Association.
The extended versions of the rules and guidelines can be found on the International Trade Administration Commission of SA’s (Itac) website.
It’s a tough set of rules and regulations, but then again, they are there to protect a scarce and precious commodity – jobs.
If South Africans were allowed to import cars freely from other countries (like the UK, for example), there would be a drastic effect on the motoring manufacturing industry and the significant number of people it employs.
When viewed from this angle, the government’s argument certainly has merit. SA has a general unemployment rate of 25.5%, so the government should do all it can to create and protect jobs.
According to Itac, around 124 000 people are employed in assembly and component manufacturing and this sector contributes about 20% of total manufacturing in SA. If the import market were to be opened to everyone, it would have a drastic long-term effect on the motoring industry. Not only would it result in the loss of thousands of jobs, but the trade value of every vehicle would be at risk. The used car market would suffer most as dealers wouldn’t be able to lower their prices to a competitive level, while new car sales would taper off, because of the loss of trade-in value on a prospective customer’s current vehicle.
There are other concerns as well. Could an imported car be serviced in SA, and if so, where? Would parts be available? Can one get insurance on an imported car and if so, how much would it cost me? Are there any safety/quality concerns?
We looked for the answers. Enter Johan Kriek, avid letter writer to Leisure Wheels and owner of Springbok Imports — a company that helps immigrants obtain import permits for their vehicles. He also occasionally helps a few select customers to import vintage and collector vehicles, even though this is much harder to do these days on the collector’s side.
Kriek says the people who decide whether a car is indeed a collector’s item aren’t always consistent, or knowledgeable enough to make the right call on whether a car qualifies.
Kriek, who has been in the motoring industry since 2003, is a passionate petrol head and a vocal critic of the Itac regulations. He feels the legislation is much too strict and the reasoning behind it, “rubbish”. “The importation of used vehicles poses no threat to the local manufacturing industry and the 124 000 people it employs,” he says.
Kriek proposes a system whereby certain companies or used car dealers are allowed to import vehicles for customers. He’s not suggesting that SA opens its borders unconditionally for used vehicles, but rather a quota system, which would allow a number of used vehicles to be imported each month.
He argues for a figure of about 60 “enthusiast and special” vehicles, which would equate to less than one percent of total monthly sales in SA.
“The automotive manufacturing and sales industry would not be affected at all and every month 60 individuals would fulfil their dream wheel requirements, or special vehicle requirements,” says Kriek.
It certainly makes sense from a consumer perspective. As Kriek says, only serious automotive fans would make use of this method. He describes the potential customer as someone who already has two cars in his garage, but wants something “fun” to play with over weekends.
The question is, how would this quota system work, and where would the buck stop in terms of the number of cars imported each month?
Kriek proposes a list of vehicles that would qualify, on the lines of the methods used in the US and Australia.
Australia has a list called the Register of Specialist and Enthusiast Vehicles. It includes more than 2000 passenger cars, LCVs, trucks and motorcycles that may be imported as used items. The passenger and bakkie list alone consists of 436 models that may be imported by individuals. More importantly, the government relies on established motor vehicle clubs and independent organisations to compile and update the list for it.
According to the Australia’s department of infrastructure and regional development, its intention is to make available motor vehicles which cater for specialist and enthusiast interest. So Australia not only accepts the existence of motoring enthusiasts but actively helps them indulge in their passion.
There’s a similar situation in the US, though the list is limited to around 600 passenger cars and bakkies. As long as the vehicle passes a strict inspection done by the National Highway Safety Administration (not necessary for a vehicle older than 25 years) it can be imported.
Kriek proposes a similar system in SA, whereby a list is compiled by leading car clubs or motoring organisations. It would be updated at the end of each month to ensure the market isn’t oversaturated by a specific vehicle. The list could then be adjusted as required.
The rule that you may not sell your vehicle for two years would still apply, so it would be a win-win situation for the enthusiast, who wants a special set of wheels, and the government, which would look after precious jobs.
What does Itac feel about this proposal? At the time of writing we were told Itac was not allowed to speak to the press without the written permission of the Chief Commissioner. We sent an e-mail asking for comment on the proposed system, but received no immediate reply.
The other concerns raised are far easier to remedy than the actual process of importing a car.
Would the availability of parts be an issue? Yes, unfortunately, but not as big an issue as you might think. Kriek has dealt with the problem, and says there is always a dealer willing to help. Waiting for a part may be tiresome, but we are not discussing cars that would be used on a daily basis.
It’s more or less the same situation when it comes to servicing. One dealer might refuse to help out, but since the warranty on the imported car is void anyway, the use of a reputable garage not tied to an original equipment manufacturer is an option.
“There’s always going to be someone willing to accept the business, and this way the owner of an imported car is pushing money back into the South African economy,” says Kriek.
Applying for insurance is a bit trickier, but Kriek says it’s a case of shopping around. The owner needs three valuations for the car and then it’s a case of finding an insurer ready to take the business. Kriek admits that this type of insurance is more expensive, but in all his time in the industry, he has never had a problem insuring one of his personal vehicles.
Then there are the big questions; Is an imported car as safe as an SABS-approved car and, more importantly, is it safe to import certain vehicles for a certain clientele?
Yes to the first. The safety levels of cars are tested rigorously in the countries the imports would come from. Take the UK as an example. Its legislation is stringent on safety, so much so that an older car is required to have a roadworthy certificate once a year.
The safety argument is also rendered moot when you consider the state of some of the cars on South African roads. Regular viewers of Carte Blanche will know how easy it is to get a roadworthy certificate for a vehicle that’s basically nothing more than scrap. The investigative team was able to acquire a roadworthy certificate for a truck without wheels!
As for the question regarding certain clientele — well, that’s a grey area. The government is rightly wary of young men importing powerful cars such as the Toyota Supra and Mazda RX-8, for obvious reasons, but once again Kriek provides a counter argument. In his experience a lad with a penchant for speed will find a way to go fast no matter what. If he isn’t allowed to import the famous Supra, he’ll simply buy a Nissan 1400 Champ, or some other tuner favourite, and pour money into it until it satisfied the need for speed. In any case, a Supra was designed to be fast and is arguably safer than a tuned-up Champ. But wait, let’s not call it safer — just the lesser of two “evils”.
The off-road community, we feel, would welcome a system such as the one Kriek proposes. A free-for-all import scheme would cause havoc, but where’s the harm in indulging in a passion for motoring? There are hundreds of people out there who want a cheapie weekend toy, or a cult classic off-road machine, but, unfortunately, they are denied the pleasure in the current situation. At the end of the day, it’s an unfair battle — a few diehard petrol heads vs outdated legislation written to protect an industry that doesn’t appear to need it. To us it seems like using a bazooka to kill a mosquito.