The Automotive Gray Market: An Inside History

In the 1970s, as car enthusiasts in the U.S. grew bored with models manufactured under tightening pollution and safety regulations, some innovative dealers exploited a legal loophole-designed to allow U.S. soldiers and diplomats to return from abroad with their vehicles-to import exotic cars never intended for sale in America. During the 1980s, a rise in the value of the dollar made car shopping in Europe a bargain hunter's dream. A network of unauthorized "gray market" dealers emerged, bypassing factory channels. Middle-class Americans suddenly found they could afford a Mercedes or BMW. These cars had to pass through U.S. customs, equipped to handle only a few independent imports annually. As applications ballooned, the regulatory system collapsed. This is the story of a misunderstood but fascinating period in the automotive industry, when creative importers found ways to put American motorists in new Ferraris while the EPA and DOT were backed up with mounds of paperwork.