May 1, 2010 - The single market in Europe and CE marking has provided major benefits for manufacturers and users of aerial lifts and cranes, but has it now become something of a Non Tariff trade barrier?
The word ‘Grey Import’ summons up a range of reactions depending on what side of the fence you are on. For equipment dealers it can potentially undermine pricing and margins. For buyers it may offer an opportunity to buy a product not otherwise available or to benefit from a lower price.
I must declare an interest here in that a number of years ago I purchased a new Land Rover Discovery in Cyprus and imported it back into the UK. Why? Well it saved me more than £5,000 at the time even after allowing for the shipping, importing registration and buying a week’s all-in vacation for a friend to fly out and pay the local dealer and make sure it was safely loaded on the ship.
The whole process was very easy and in the end the brand new car cost me less than a two year old one. I was delighted and thankfully I did not have to worry about any warranty claims, although the manufacturer’s manual stated that warranty was available worldwide – so it should not have been a problem.
When it came time to replace the car did I go back to Cyprus? No. Why not? Well first of all Land Rover had made it very difficult for the local dealers to continue to sell to foreigners, but most importantly the ridiculous price differential had almost evaporated and while I still had to pay a premium to buy a British-built car in the UK, it was modest and worth the peace of mind of buying from someone just down the road.
The Land Rover decision was an easy one, it was built in the UK and sold to Cyprus in the same regulatory specification as in the UK. When it comes to construction equipment it can be much more complex, with different rules and specifications applying in different regions of the world. Just as each country in Europe used to be different. There are also questions of import duty to consider.
When it comes to new equipment some manufacturers have taken legal action to block the import of new product through any channels but their own (Mostly into the USA although also into the EU). The argument pivots around the potential undermining of the brand by the importation of models not designed or built for the local regulations and market conditions.
There is some validity to this argument when it comes to someone buying a product designed and built by an international manufacturer for, let’s say the tropical regions of the developing world and then importing it into northern Europe to sell on the open market. A product that might be ideally suited to a small farmer in Angola may not measure up to the expectations of a contractor in Germany.
However when it comes to an individual buying a machine for his own use with full knowledge of what he is getting for his money, surely that is different? Certainly when it comes to cars the rules for ‘personal imports’ are not the same as for commercial importers intending to sell the car on the open market.
In the EU most concerns have focussed around the import of used aerial lifts from the USA where prices tend to be substantially lower. The major issue of course is that lifts sold into the North American market do not fully meet the European Machinery Directive or the EN280 standard. In other words they are not CE marked.
For most modern lifts the differences between the North American and European products are minor, as manufacturers have moved towards ‘global’ machines and conversion usually involves the fitting of some additional switches, wiring changes and the installation of an overload device. Some manufacturers will assist customers to convert such machines to the CE specification and then certify them - others will not or at least try and make it financially punitive.
In the case where a manufacture will not assist it is still possible to obtain an independent CE approval, especially if the manufacturer provides access to the original CE technical file. If not then it is far more challenging, although not impossible.
Manufacturers which campaign that grey market machines are unsafe, risk raising very serious questions, such as why is it OK to sell ‘less safe machines’ in those areas where regulations allow? There is an argument of course that it is necessary to compete with local producers who do not fit all the safety devices and there is something to that - although there are those who would question such a policy.
I am personally in favour of a worldwide ISO standard and free trade. If something is truly safer for a European then surely it will also benefit an Australian or American?
So coming back to my original thought and the question for our next poll, should manufacturers assist those who import their used machines into the EU - and by assist I mean providing the information and if necessary the parts, at a commercially fair price – or are they right to block such imports in any way they can?
We appear to be sliding into an era where truth and facts are seen as disruptive irritations, not only by outspoken ‘populist’ politicians, but increasingly of large companies and industry associations.
Would companies benefit financially from being more open, honest, transparent and truthful?
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