Friday 1 March 2024

South African under threat of becoming the graveyard of foreign second-hand cars

By Xolile Bhengu

At first glance, it looks like any other ordinary car lot until a heavily armed private security and two gates stop you from viewing the cars behind them. The armed guard provides 24-hour security for used vehicles that have travelled from Japan in ship containers. On a daily basis, potential buyers in Southern African Development Community (SADC) and beyond bid on virtual platforms to secure these cars. Once purchased, they leave the Durban secure parking near the harbour by truck to meet their new owners. 

A car salesperson at the car lot, who asked not to be named, says he has sold many Japanese right-hand drive vehicles in the last ten years. He says his journey to become a salesperson with a Pakistan national owned car dealership was coincidental. Several individuals and long-distance taxi drivers would arrive at the plot in search of these vehicles, and he would advise them of the relevant salesman's arrival time.

He would, in turn, receive a commission for persuading a potential buyer to wait patiently. After realising that he could make more money being a salesperson he left his security guard job and grabbed the opportunity to become salesperson. 

The South African government has built guardrails against the purchase of second-hand cars from foreign countries to protect its automobile manufacturing industry, especially in provinces such as KwaZulu-Natal and the Eastern Cape. However, these guardrails are under threat considering that there is a community of foreign nationals living in SA who can purchase these second-hand imported cars on behalf of South Africans. 

Furthermore, developed countries are under pressure to remove older car models from their roads to reduce air pollution and global warming. These two forces have coalesced to create a vibrant market for second hand foreign vehicles in SA. In 2020 the United Nations Environment Programme released a report that detailed the flow and scale of second-hand cars imported from the European Union (EU), Japan and the United States of America (USA). According to the report the EU was the largest exporter with 54% of the total followed by Japan (27%) and the USA (18%). The report further mentioned that major destinations of used vehicles from the EU were West Africa and North Africa; Japan exported mainly to Asia and Southern Africa and the USA mainly to the Middle East and Central America. The largest recipient of these cars was Africa absorbing 40% followed by Eastern Europe (24%), Asia Pacific (15%), the Middle East (12%) and Latin America (9%). 

Weak regulatory enforcement and corruption at the ports of entry contributes to the influx of unroadworthy vehicles entering African markets. Many second-hand vehicles shipped to Africa from Japan are believed to have failed or were about to fail, pollution tests there, according to the U.N. Environment Program. However, these cars have managed to enter the African market. 

Buyers think that these cars are cheap though the salesperson at the Durban lot does not agree. “I don’t understand why people say these cars are cheaper. 

The cheapest car is about $1 800 US dollars (+-R27 446). Before the car leaves the plot there are export fees that must be paid, and the Beitbridge Border bound truck and manpower that transports the cars to the border. When you add all that together, how many people in [those economies] could afford [such expenses]?” says the salesperson when asked whether second-hand cars are cheap.

He however added that there are advantages of buying imported cars. “The only advantage I can personally see from purchasing these vehicles is that the process of owning one is easier. Unlike SA, the owner must have the funds paid in full to the company account which removes the issue of monthly repayments, and we don’t have the requirement for the vehicles to be insured – owners must insure the cars in their countries,”. 

For buyers in SADC, buying these cars can be expensive considering the added expenses of releasing and transporting the cars. But for South Africans a price tag of R27 000 makes these cars a cheaper option to buying new cars. SA buyers can use their foreign national friends and family to secure these vehicles for use in the country. 

When asked whether there are other dealerships that sell imported cars, the salesperson at the lot did not admit. “I cannot speak for the other dealers that are present in Durban.  But my employer does not allow South Africans to purchase imported cars. We only sell them to people from neighbouring countries. You cannot even enter our plot unless we can see that you have a valid passport.”

“I cannot speak for other people that the cars don’t end up on SA streets through other means, but I would warn people that sooner or later there will be a price to pay for that,” he further said.

However, on several occasions some foreign nationals have approached his dealership and offered to assist locals to register the cars locally for a fee of R15 000. He says they turn down these offers regularly. These attempts at violating SA’s guardrails to purchase imported used cars might have succeeded in other dealerships. In 2018, it was reported in the media that South African Revenue Services (SARS) destroyed imported illegal vehicles valued close to R4 million after being seized from their owners. 


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