Counterfeit and gray market automotive components are a growing concern and an expensive problem. Besides creating financial losses for legitimate manufacturers, the use of poorly constructed counterfeit, fake and knockoff parts increases costs and shop time due to reduced life, failures and breakdowns because they don’t hold up or perform like genuine parts.
Since these parts typically are not built to OEM specifications to deliver consistent and reliable performance, they can lead to other mechanical problems and system breakdowns. All of which negatively impact fleet and shop productivity and profit.
In addition, those who sell and install poor quality and/or imitation parts can damage their reputation, or worse, face liability issues should a product failure have catastrophic consequences.
“Few manufacturers worldwide are equipped to manufacture, or approve for sale, OEM-quality commercial vehicle replacement components for aftermarket use,” says D. Mike Pennington, senior director, global marketing - communications, for ArvinMeritor. The company is a premier global supplier of a broad range of integrated systems, modules and components to original equipment manufacturers and the aftermarket for the transportation and industrial sectors.
“Many manufacturers don’t have the engineering expertise, the understanding of the part’s original design or the quality manufacturing processes to match the exacting performance specifications of an OE component. They cannot match the safety, reliability or durability of the original.
“To keep costs attractively low, unapproved parts may use cheaper materials and lower grades of metals that can lead to component failures,” Pennington goes on. “If untrained labor is used, error-prone manufacturing can result. Quality standards simply do not exist at some low-cost manufacturing facilities. And there is no after-sale support. ‘Buyer beware’ applies to parts dealers and distributors as well.”
Numerous government agencies and industry sources estimate the total global cost of all counterfeited products to be between $600 billion and $650 billion per year, says Steve Handschuh, president and COO of the Automotive Aftermarket Suppliers Association (AASA), the only trade association that exclusively represents the North American aftermarket supplier industry.
In 1981, when auto parts and other sectors faced a major global counterfeiting problem, the Automotive Aftermarket Industry Association (AAIA) estimated that counterfeiting cost the global automotive parts industry about $12 billion a year and, conservatively, cost the United States some $3 billion, says Lee Kadrich, AAIA vice president, government affairs and trade. At that time, annual aftermarket parts sales were $54 billion versus around $388 billion today.
AAIA is an association that represents organizations that manufacture, distribute and sell motor vehicle parts, accessories, services, tools, equipment, materials and supplies.
“The distinctive trademarks - signs, wording, colors, figures and so on - that have been developed and registered by U.S. companies are brands representing genuine products,” Kadrich says. “Counterfeit trademark is defined as a mark that is identical or substantially indistinguishable with the registered trademark. Counterfeiters steal these trademarks to mark their fake products because they know buyers want the quality products represented by U.S. trademarks.
“The terms used to discuss the problem are important, and one can interchange counterfeit with words such as fake or bogus.”
There is an important distinction between re-engineered aftermarket products and counterfeit products, Kadrich points out. “Unless someone has stolen a company’s trademark or its patents, trade secrets or other intellectual property, there is no legal impediment to its products competing with OEM parts for aftermarket sales. Independent aftermarket suppliers, with quality production techniques and sophisticated testing, have succeeded in supplying replacement parts. The market is a harsh judge, and those companies with poor performing products will fail.”
Steve Hanschuh becomes executive vice president and COO of MEMA.
AASA exclusively serves manufacturers of aftermarket components, tools and equipment, and related products. It is a recognized industry change agent – promoting a collaborative industry...
Quarterly report indicates the automotive aftermarket is still keeping pace with the general economy.