THE BOOMING GRAY MARKET is expanding. Until now, gray marketers have taken advantage of the strong dollar and well-known trade-marks to import such upscale consumer goods as cameras and sports cars, undercutting the going rate in normal channels of distribution. Dan Rife figured he could apply the same strategy to industrial goods.
His company, MCI Equipment Inc., imports backhoes, loaders, and other construction equipment from the European subsidiaries of U.S. companies. It sells the same loader that goes for $125,500 at a Deere & Co. dealership for a mere $85,000, the difference being that Rife buys his in France, imports it, and writes his own warranty.
Gray marketers also import semiconductors and forklift trucks. Nobody knows if the trend will spread to other categories of industrial goods. Many buyers are wary that the machines they purchase might not meet U.S. regulatory standards and that manufacturers might refuse to provide service on gray goods. On the other hand, says Rife, "It's a worldwide market. Why should American contractors pay more than the guys in Europe?"