The gray market for imports in the United Kingdom exists - in varying volumes and degrees of legality - in several other nations.
Some 40 percent of imported cars in Russia enter the country through the gray or black markets. Buyers save up to 35 percent for a vehicle that has been smuggled into the country, and up to 25 percent for a so-called gray import.
Gray imports enter the country using one of a number of customs loopholes. For example, a returning worker is supposed to keep the vehicle for six months - but he sells it almost immediately.
The biggest problem is that many black or gray vehicles are not approved for Russia and break regulatory rules. The fact that such a large number of foreign makes are not sold through dealers skews sales and registration figures in Russia.
General Motors CIS is at the forefront of a fight to block gray imports, which find their way past customs along with an equally unknown number of stolen vehicles.
Target areas for gray importers are medium-priced vehicles. GM spokesman Dmitri Choulga said: 'The cheap domestic vehicles have continued to sell, as have luxury marques.'
The gray market has hurt Volvo sales, said Donal O'Donovan, general director for Volvo Car International AB in Moscow.
Volvo sold 2,334 cars in 1997; 1,280 in 1998; and 400 cars through August of 1999.
Many vehicles are bought with cash - literally bags of money, an indication of Russia's burgeoning underground economy.
The government has closed one or two more loopholes so the number of gray units entering the market should decline in the future. The stock levels inside the country indicate this is not happening much. Importers are working with the State Customs Committee to identify authorized dealers who supposedly will be allowed to import vehicles.
In Thailand, gray imports are handled by some highly reputable companies. Generally, they sell models not available through legitimate importers, such as large Toyota and Nissan minivans, which sell well as an alternative to the VW Caravelle minibus.
Thailand's automakers do not appear to mind, however, with dealers happy to carry out warranty and service work on such vehicles.
One company, SEC, announced after the Bangkok Show in December it had taken orders for 192 vehicles at the show. The company also imports more exotic vehicles such as Mercedes-Benz coupes.
Additional reporting by John Boley