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Grey import vehicles are new or used motor vehicles and motorcycles legally imported from another country through channels other than the maker's official distribution system or a third-party channel officially authorized by the manufacturer. The synonymous term parallel import is sometimes substituted.[1][2]
Car makers frequently arbitrage markets, setting the price according to local market conditions so the same vehicle will have different real prices in different territories. Grey import vehicles circumvent this profit-maximization strategy. Car makers and local distributors sometimes regard grey imports as a threat to their network of franchised dealerships, but independent distributors do not since more cars of an odd brand bring in money from service and spare parts.[citation needed]
In order for the arbitrage to work, there must be some means to reduce, eliminate, or reverse whatever savings could be achieved by purchasing the car in the lower-priced territory. Examples of such barriers include regulations preventing import or requiring costly vehicle modifications. In some countries, such as Vietnam, the import of grey-market vehicles has largely been banned.[3]
- ^ "Consumer and Business Services – Used car". Archived from the original on 2015-05-15. Retrieved 2015-07-21., Government of South Australia. Retrieved 2015-07-21.
- ^ Parallel imports Archived 2014-12-13 at the Wayback Machine, World Health Organisation. Retrieved 2014-12-12.
- ^ Stephen Edelstein (30 August 2013). "What you need to know to avoid seeing your grey market car get crushed – Digital Trends". Digital Trends. Archived from the original on 28 January 2015. Retrieved 24 January 2015.