What is a grey import

What Does A Grey Import Mean?

You may have heard the term 'grey import' and wondered what it means. The term grey import refers to products that are imported into a country without the consent of the official manufacturer and distributor. In a broader sense, this can refer to all types of goods imported into Australia.

For example, you might buy your TV in Hong Kong and have it shipped to your home in Australia. However, most commonly, the term grey imports refer to vehicles that are either parallel imports or grey market imports.

Grey import vehicles can be both new and used, but typically, they are used cars from Japan and occasionally from other countries. You may buy grey imports at a less expensive price than similar models manufactured by American companies that are available for sale in the US due to:

• Differences in regulations

• Costs of importing and manufacturing

• Currency exchange rates

• Other factors related to market pricing

Grey imports usually suffer from additional operational restrictions, like emissions standards, that may affect performance and safety significantly compared to similar vehicles manufactured by domestic car manufacturers.

These cars have become popular due to increasing globalisation and the ease with which consumers can purchase vehicles from different countries.

Globalisation And Its Impact On Grey Imports

You might be wondering what globalisation has to do with grey imports. The answer is that it has everything to do with them. Think about it—it wasn't until the advent of the internet that countries opened up their borders to one another, enabling cross-border transactions.

Globalisation and the ease with which consumers can buy and sell goods between countries have made grey imports easily accessible. Consumers now have a greater choice of vehicles than before, and shipping costs have been lowered to make international purchases easier.

What You Should Know About Grey Import Cars

Car buyers can now purchase a vehicle from almost any country and have it delivered to them. An imported vehicle is any car manufactured and sold in one country and sold to another. These vehicles are subject to the regulations of both countries, but it can be confusing to navigate conflicting rules.

For example, some countries have specific regulations on vehicle safety features. Passenger vehicles must have airbags and ABS brakes, while heavier trucks may bit be required to meet these rules. If a car does not meet these requirements when imported, the buyer will be required to install these features.

You'll need to work with a grey importer to buy an imported vehicle from a different country. This is someone who specialises in the logistics of moving cars from one country to another without going through all of that country's legal channels.

Import regulations are complex. So, it's always best to work with an expert who can help you find the car you want and safely ship it home at an affordable rate.

What Is Parallel Importing?

Parallel importing is sourcing products from overseas for sale in Australia. This occurs when a parallel importer or parallel distributor buys the product overseas and brings it into Australia for sale.

The main reason why a consumer would purchase a grey import is that it is cheaper than buying the same product here in Australia or purchasing a similar Australian product.

Another reason is that if you're looking for products that are not available in Australia, or are not available in the same form or configuration as they are overseas, then you may need to hunt down a grey import!

So, who is a parallel importer?

• A parallel importer is a person or company that brings a car into its destination country.

• A parallel importer is also known as an independent importer.

• A parallel importer is not necessarily an authorised dealer for that make of car. Authorised dealers bring cars directly from the manufacturer.

• A parallel import is a product imported overseas by an entity other than the manufacturer or their authorised distributor.

Parallel imports are usually new products and are often imported with the full knowledge and permission of the manufacturer.  The vital thing to note about parallel imports is that they are not grey imports. They may be relatively similar in some instances, but there are key differences.

A parallel import is typically a product not available for sale in Australia, at least not officially through authorised distributors. They're usually sold at competitive prices to offer consumers more choices. As long as the importer has respected all intellectual property rights, everything is above board.

Why Would You Buy A Parallel Import Car?

There are many reasons why you might wish to buy a parallel import car. They include:

Lower price

Parallel imports can be cheaper because they don't have the same ongoing costs as cars purchased through official channels, such as warranty and service costs. They may also be more expensive in some cases.

Access to the latest models

The car you want may not yet be available in Australia, so importing it yourself gives you access to it now rather than waiting for your local dealer to stock up.

More choice

There may not be a wide range of models available in Australia. The other issue may be that some dealerships only have cars in a limited range of colours or only a handful of vehicles. Importing yourself gives you access to a variety of models.

The Pros And Cons Of Buying A Grey Import Car

These imports can be significant for buyers as they may be cheaper to acquire. However, their clearance takes time as they must be assessed for compliance with Australian Design Rules. Their registration also takes longer than buyers expect.

For instance, if you buy something from Europe that doesn't conform to Australian Design Rules (ADR), you probably won't be able to register it for road use. If yours did infringe on one or more aspects of ADR and was previously registered in Australia, the chances are you won't be able to register it in your name or sell it either.

The pros

If a registered dealer in Australia doesn't sell a car, it's considered a grey import. In general, this means you'll be getting a car that is sold without the manufacturer's permission. You can get cars that aren't officially sold in Australia or those sold in other markets at different specs than they would be here.

On a broader scale, grey imports are rarer and have lower mileage than cars bought from official dealerships. Because the demand for these cars is lower and supply limited, there is often a discount on the price paid and any taxes or duties put on them by customs.

This makes buying from overseas cheaper than buying from authorised dealerships—just make sure to include shipping costs in your budget!

The cons

Buying a grey import vehicle often means you're also giving up several benefits that come with buying a car locally. These include:

Non-compliance with Australian standards

The car you're buying was never meant to be sold here, and as such, it has not been tested by Australian authorities for roadworthiness and safety. If there are any problems with it, the authorities will likely not accept that you didn't know about them when you bought the car.

No Australian warranty

All cars purchased in Australia come with a statutory warranty from their manufacturer, covering defects in build quality for three years or 100,000 kilometres, whichever comes first.

If you buy an imported used car, this doesn't apply to your vehicle. This means if something goes wrong due to the manufacturer's fault, then they won't help fix it unless they have an existing arrangement in place in your country of residence, which is unlikely.

No Australian dealer support

When a vehicle registered in Australia needs servicing or repair work done on it at one of its local dealerships, then this falls under what's called 'warranty service' requirements. Any faults found must be fixed without charge within 12 months from the purchase date or until 100,000 km have been driven since purchase, whichever expires sooner.

This does not apply If something breaks down in your grey import. There isn't really any local dealership support available for these types of vehicles in Australia. Neither do repairs made by overseas manufacturers fall under normal legal obligations.

If something breaks down due to a manufacturing error while abroad, then don't expect anyone but yourself to pay for repair costs incurred as well as any associated insurance claims.

You cannot trade in your car

One of the ways to sell a car in Australia is trading it in for another. This is all thanks to dealership statutory warranties. However, this cannot happen where grey imports are concerned because statutory warranties do not cover them.

Factors To Note In The Grey Imports Trade

Authorised distributors

You might think that a warranty is just a piece of paper, but it's actually valuable for covering the cost of damage or defects on your product. If you buy from an authorised distributor, you can be sure that its warranty will be valid and honoured if something goes wrong with your purchase.

On the other hand, if you purchase from a grey importer, there's no guarantee that any warranty coverage is available.

Some manufacturers have strict rules prohibiting grey importers from issuing warranties within their territories, so even if the seller promises a one-year warranty, there's no way to enforce it. Good luck getting reimbursed by someone who's not an authorised vendor!

Price differences

You might think that price differences are due to currency fluctuations alone. There are many other factors to consider when comparing the cost of an imported product. Supply and demand are key factors, as is the exchange rate between two countries.

Then there are various taxes and duties to think about. For example, the US government levies 25% tariffs on large motorcycles like Harleys that have engines sizes 700cc or larger; a 750cc Harley sold in Australia will therefore be more expensive than one sold in the US, regardless of market conditions or exchange rates.

Other factors that impact pricing include:

• Economies of scale (larger economies may have lower production costs)

• Distribution costs (a car made 16 km from your house will be cheaper than one produced 16,093 km away)

• Inflation

• Interest rates

Warranty problems

One of the biggest issues you could face with a grey import is finding a mechanic who knows how to fix the car. The car is not typically sold in your country, so finding someone who services the vehicle may be hard if there are no dealerships that specialise in repairing it.

Another problem could be that your car has been used for too long and may need a lot of repairs. This can mean spending more money than what you bought it for and having to register it as an imported vehicle when you get it repaired (in some cities). This will then cost even more money and time!

There are ways around this, though. Consider getting warranty extensions, insurance coverage, or service agreements with mechanics who know how to repair these vehicles. These precautions will help ensure that any issues related to maintenance aren't too costly.

Grey Import Issues You Must Be Aware Of

Issues associated with grey imports include:

Warranties and service contracts

Consumers should be aware that importers may not provide warranties or service contracts for the goods they sell. As a result, consumers are liable for any damage incurred during shipping or after the item has been purchased.

Quality and safety

Consumers should also determine whether grey imports meet applicable quality and safety standards in their country of origin. These items may not undergo Australian inspection before being put on the market.

Fraud and illegal goods

Counterfeit products such as fake designer handbags are illegal in Australia; consumers who buy such products risk prosecution under Australian laws, including those relating to copyright infringement. Grey imports and parallel imports are commonplace in Australia, but it's essential to know the facts before purchasing a product.

Are Grey Imports Worth The Trouble?

There are some key considerations before taking the plunge and buying a grey or parallel import. The best place to start is familiarising yourself with the market. Grey imports can be new or used, but manufacturer warranties may not cover them. Cars with parallel import status are new and come with warranties.

Although it's important to know that parts may be harder to come by for these types of vehicles. Next, you need to be aware of the risks of buying a grey or parallel import. You won't have access to authorised service agents, and in some cases, your car may not meet Australian standards.

It's also essential to make sure you know what you're buying – check if there are any defects and look out for flood damage, hail damage, and other signs of wear and tear that could negatively affect the value of your car. If you have any immediate concerns or questions regarding grey imports, you can head to your local car buying and selling company to point you in the right direction.