Ban on `grey' car imports is lifted

CURBS ON the import of cut-price cars built outside the European Union are to be abolished, the Government announced yesterday. The move could allow up to 55,000 "grey imports" into Britain next year from Japan and other parts of the Far East.

Motor manufacturers and franchised dealers had been fighting a rearguard action to prevent the immediate lifting of restrictions on grey imports - vehicles which do not comply with EU approval - on the grounds that it could endanger safety. Under a compromise agreement hammered out by Stephen Byers the Secretary of State for Trade and Industry and the Transport minister John Reid, the present limit on grey imports will be progressively lifted but in return they will have to meet tougher environmental, safety and security standards. Mr Byers said: "We expect that many cars will cost thousands of pounds less as a result."

The present single vehicle approval scheme limits grey imports to 50 cars per model. From March next year this will be raised to 1,000 and thereafter increased by a further 1,000 each month until January 2001, when the limits will be abolished altogether. Grey imports are, on average, one-third the price of EU-built cars cars but manufacturers have warned that, since the cars are not imported through franchised dealers, buyers could have difficulty getting spare parts and getting them serviced.

The Society of Motor Manufacturers and Traders gave the move a cautious welcome butsaid consumers needed to know what they were buying.