Counterfeit parts

Suggestions for avoiding them and their consequences


FOREIGN PARTS

The majority of counterfeit auto parts in North America are imported, with the majority produced in China, concur AAIA’s Kadrich and AASA’s Cameron. China accounts for more than 80 percent of the goods seized at U.S. borders, notes Cameron.

“China joined the World Trade Organization (WTO) in 2001 and the Obama Administration has continued the Bush Administration’s excellent efforts pressing China to comply with its commitments to protect IP,” Kadrich says, although progress has been slow.

Other countries reported as major producers and exporters of counterfeit goods include India, Pakistan, Russia, Taiwan, Korea, Uruguay and Vietnam.

“The Congressional Research Service concludes that compared to foreign countries, counterfeits produced in the United States are estimated to be relatively low,” says Kadrich. “Given production costs in the U.S., I think this is especially true for auto parts, although there is production of counterfeit packaging and labels.”

Adds Cameron of AASA: “Even though the industry estimates millions of counterfeit auto parts enter the United States every year, only a fraction of them are ever detected by U.S. customs. This is no surprise considering that nearly two million entries per month are logged at 302 different U.S. ports.

“Local police and courts in some countries are hesitant to pursue counterfeiters, particularly when powerful state-owned enterprises are involved or a local economy may be negatively impacted,” he continues. “Some examples include state-owned factories which began copying foreign brands to use excess production capacities after legitimate sales of their own goods fell, and the mixing of fake goods into legitimate product shipments.”

Probably the greatest factor in the spread of counterfeit goods has been the explosion of global Internet sales, observes Cameron. “Worldwide e-commerce has had a huge impact in accelerating the pace of all counterfeit products, including automotive parts. Online auctions and other sites that link sellers to buyers have made the counterfeit parts trade an international problem of potentially epic proportions.”

Cameron says the Internet poses many threats, including:

Pure counterfeit product or direct knock-offs.

IPR violations related to proprietary or patented designs related to the manufacturing of the product.

Trademark infringement of not only the product itself but also related products such as apparel, decals or anything with a logo.

Violations of supplier agreements by contract manufacturers selling around the owner of proprietary or second party-owned tooling known as diversion.

Adherence, or lack there of, to distributor agreements which limit sales by geographical or territory boundaries, known as “gray market.”

PREVENTION MEASURES

There are some things maintenance managers, repair professionals and do-it-yourselfers can do to avoid purchasing counterfeit parts, says Cameron. Among them:

Purchase brand name parts made by full service aftermarket suppliers who stand behind their products from trusted parts resellers.

Research the parts before purchasing by talking to repair professionals or searching on the Internet.

Remember the old adage: If a deal seems too good to be true, it probably is. Always be suspicious of brand name products available from an unfamiliar source at bargain pricing.

“Maintenance managers also should be aware that any state, local or government agency can investigate suspected counterfeit parts sales,” he says. “However, law enforcement agencies can only investigate the offenses they know about. So, it’s up to all of us in the industry to let them know about suspicious products.

“Another resource for maintenance managers is the full service automotive aftermarket suppliers who manufacture quality parts,” goes on Cameron. “Nobody knows their products and trade dress better than the manufacturer,” adds Cameron.

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