Grey Import Vehicle

Grey Import Vehicle

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. The synonymous term parallel import is sometimes substituted.

Car makers and local distributors sometimes regard grey imports as a threat to their network of franchised dealerships, but independent distributors don't mind since more cars of an odd brand bring in money from service and spare parts. Also, 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. 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. Grey import vehicles circumvent this profit maximization strategy. In some countries, such as Vietnam, the import of grey-market vehicles has largely been banned.