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SA moves against used car imports

The probe comes as South African carmakers, many of them under the National Association of Automobile Manufacturers SA (NAAMSA), decry the pressure on their businesses from cheaper used imports registered in Botswana and Namibia.

Industry bodies also say the used imports may be flouting roadworthiness protocols and could also be guilty of criminal association as they do not require police clearances to be driven in South Africa.

According to documents made available to BusinessWeek, SA's Ministry of Economic Development is probing how to tighten its regulations regarding the movement of used imports and their operation in South Africa.

While South African law already controls the import of used vehicles, NAAMSA and other industry bodies are alleging that second-hand imports with Botswana, Namibia and Swaziland number plates are proliferating in South Africa. The sectoral organisations say this points to loopholes in the law, suggesting that South Africans and others are able to import and operate their vehicles in that country on a continuing basis, despite the law.

"Those countries issue import permits for second-hand cars," Business Day quoted NAAMSA director, Nico Vermeulen, as saying. "You can see it on Johannesburg's roads - there are cars driving around with Namibian or Botswana plates.

The problem is escalating and illegal importers could use containers."

Efforts to contact Vermeulen yesterday were unfruitful as he and other senior officials were said to be in meetings. The SA government announced the launch of the probe responding to motor industry concerns and MP Dirk Feldman's question on the matter last week.

"It may be necessary to review the existing system based on feedback from affected parties," said Economic Development Minister, Ebrahim Patel, responding to Feldman's question. "I have requested the department to consult with industry bodies regarding their views and we would welcome views from Members of Parliament and the wider public.

In Two Months, No More Dubai Import Cars for the Namibian Market ...

In just two months from now on, no cars that are more than 5 years old bought in Durban and or registered in Botswana would be allowed to enter Namibia. Why?

Here is the thing, and a very sad thing in my opinion. In Namibia, as the unemployment rate skyrockets past the 54% mark, some people have found a way to become self-employed, by buying and selling cars.

They go to Durban, buy cars in Durban, those generally from Dubai, and because there’s no interstate commerce relationship between South Africa and Namibia when coming to cars bought in Dubai, actually, let me retrieve a bit back.

When a car is imported from Dubai to Durban, it would have a registration plate for Dubai. When a buyer buys the car in Durban (Durban has the largest harbor in Africa), the buyer is not allowed to register it in Durban. So, in order to bring the car to Namibia, the car must be a SADC registered, hence they come to Botswana and register the car there. They pay over N$6,000 to register the car in Botswana.

Once the car is registered in Botswana, it would be a SADC registered, hence it’s allowed to enter Namibia. When it enters Namibia, the owner is only required to pay about N$500 to register the car for whatever town the owner is from in Namibia.

For all the years, Namibia has been losing out of millions of dollars in registration fees for cars from Dubai, while Botswana has been reaping all the financial benefits (no wonder Botswana has more than US$7 billion of cash reserve). If Namibia had allowed Dubai imported cars to be registered in Namibia, all that money would have been allowed to come and or stay in Namibia.

For those who have been buying cars in Durban and resell them in Namibia, have been those who have been looking to make a decent living since they may not have had jobs in Namibia. And those who buy them, are perhaps those who would otherwise not have been able to afford buying cars through traditional bank financing or cash, due to the fact that they may be the low paid wage Namibians. Hence they could only afford to buy these import cars from Dubai.

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