Really cheap cars flood Durban
There is an edgy anxiousness to the bond warehouses storing imported second-hand cars from Asia that have sprung up in the area surrounding Durban’s harbour: burly guards, sometimes armed, watch the entrance points; wire perimeter fencing ensures (foreign) passports have to be produced before access is gained and, whenever interviews are allowed, the employees appear to gather around the Mail & Guardian‘s team like the muscle in a bad Eighties action-flick.
Durban has become the entry point for in-transit second-hand cars—imported in the main from Japan—which are then exported to sub-ÂSaharan countries such as Mozambique, Zimbabwe, Lesotho, Namibia and some as far north as Zambia.
According to Deon Smith, the South African Revenue Service anti- smuggling manager, the bond warehouses (essentially storage facilities for goods in transit or for which duty has yet to be paid), in Durban have increased “70% to 80% in the past five years; there are now around 68 operating around the Durban harbour area”. He estimates that between 70 000 and 80 000 vehicles are brought in through the Durban car terminal annually.
Susceptibility to shadiness is palpable: it is illegal for South Africans to purchase these vehicles because of legislation aimed at protecting the local vehicle manufacturing industry, but while makes and specs may differ, many of these cars are remarkably cheaper than their South African equivalents on resale.
“A 1996 Corolla 1,5 manual equivalent from Japan, 100% full-house with double airbags, electric windows and CD player, will sell for around R6 000, while the same vehicle with one airbag will resell for around R45 000,” says Tahair Ahmed, manager of Royal Auto in West Street.
Mohammed Hani at Star Bell Auto Export in Point Road estimates that there is a 70% difference in price between local second-hand cars and those that are imported.
With government’s protectionism and consumers’ heavy spending the local vehicle manufacturing industry appears to be the healthiest it has ever been: new vehicle sales in South Africa have, according to the National Association of Automobile Manufacturers (Naamsa), reflected progressive growth peaking last year at 714 340 units sold, a 15,7% increase from 2005, following on a 28% growth in the previous year.
According to a Statistics South Africa’s Motor Trade Sales report, in the three months leading up to November 2006 consumers spent R9,7-million on new cars, while R5,3-million was spent on purchasing used cars. With Naamsa lauding the “outward-oriented focus” of government’s Motor Industry Development Programme, exports are also growing. According to Naamsa, exports in 2006 grew 28,5% to 179 854 vehicles, from 2005’s export total of 139 921 units.
With Naamsa warning that car prices are likely to go up this year and since South Africans are displaying a Yengeni-esque penchant for bling-on-wheels, are local consumers being short-changed?
Not so, believes Naamsa director Nico Vermeulen, who feels local car prices are “pretty competitive”: “Consumers may want to buy these cars because of their price, but there are inherent problems: there are no parts back-up or after-sales services. Then there is the question of road-Âworthiness and safety compliance and many of these vehicles have been discarded in Japan because they don’t comply with emission regulations. It is a worrying phenomenon.”
Vermeulen feels these “grey imports”, if allowed to be purchased by South Africans, could lead to job losses in the manufacturing industry, at dealerships and in the auction sector, and could bring about a withdrawal of foreign investment.
Hani begs to differ: “South African consumers pay too much ... if these cars were allowed to be sold here, then the person in the street could afford a car. Companies like Toyota are putting the screws on government, who are putting the screws on the ordinary man.”
Vermeulen added that some of the imported cars may have been stolen and that of the “70-odd thousand units brought into the country, around 15 000 to 20 000 of them stay on South African roads”. According to a South African police report, of the about 80 000 cars that came into Durban in 2004, 7 000 were listed by Interpol as suspected stolen.