China's counterfeit auto parts hurt global manufacturers

China's counterfeit auto parts have caused global manufacturers to suffer delays Published: 2004-3-23 For many years, counterfeit goods such as “brand-name watches”, computer software, DVD movies, and tennis shoes produced by China have been a heart disease for global manufacturers. Recently, counterfeiters in China have once again become passionate about producing counterfeit auto parts. In addition to causing losses to genuine manufacturers, counterfeit auto parts also pose potential safety hazards to consumers, and genuine manufacturers may also be able to go to court once counterfeit parts fail. Counterfeit spare parts have an annual output value of 12 billion U.S. dollars. The current annual value of counterfeit goods is as high as 500 billion U.S. dollars, accounting for 5%-7% of the total global trade volume, and the value of counterfeit auto parts is about 12 billion U.S. dollars. Brian Dugan, director of international affairs for the American Association of Motor Vehicle and Equipment Manufacturers (hereinafter referred to as “MEMA”), said that in the past two years, the number of counterfeit auto parts produced in China has risen in a straight line. Dugan said that counterfeit car parts are mainly from China. In addition, companies in India, South Korea and other countries also produce fake car parts. Tom Stomm, general manager of services and parts marketing at General Motors, said that Chinese counterfeiters mainly produce the most commonly used components, such as automotive fluids, brake pads, engine oil, fuel filters, spark plugs, batteries, and gear. Wind glass and so on. In most cases, the appearance of counterfeit auto parts is almost the same as that of genuine products, but the quality of products is often inferior to genuine ones. For example, American car makers complained that some counterfeit brake pads were made from compressed sawdust, and counterfeiters added dyes to cheap lubricants to make gearbox lubricants. Counterfeiters make the outer packaging of goods exactly the same as genuine products, making it difficult for consumers to distinguish between authenticity and fakeness. European and American companies are concerned that counterfeit products will get fire. Japan and European auto parts manufacturers are also uneasy about counterfeit products. The European Union Chamber of Commerce in China established a special task force in April 2003. The first task is to crack down on the counterfeiting of auto parts. Although the special task force commended the Chinese government for laws and regulations that protect intellectual property, it also criticized the existence of weak law enforcement in China. The working group stated that the investigation of counterfeiters was not strict enough and did not play a deterrent role at all. The working group also stated that sometimes, as long as the counterfeit products produced by the counterfeiters are removed from the forged trademarks, the government regulators allow them to continue selling. Car makers in Europe and the United States are concerned not only about losing their income, but they are also worried that counterfeit goods will damage the company's brand image, cause consumer dissatisfaction, and increase the cost of providing quality assurance for products that they do not produce. MEMA's Dugan said that if the product fails to perform its intended function, consumers may find the manufacturer to claim compensation. Auto manufacturers can see if there is a sharp increase in quality complaints to determine whether there are fake and shoddy goods in the market. Parts manufacturers also worry that if counterfeit products have quality defects, they may be involved in legal disputes. Fear of retribution The automakers are reluctant to say that U.S. officials have protested to the Chinese government on the counterfeiting of auto parts, but this has had little success. They also complained that they did not have the full support of American companies in this matter. Dugan said U.S. companies are reluctant to publicly offend the Chinese government because they fear that doing so will have a negative impact on their business in China. Dugan said U.S. companies are generally worried about retaliation. If the officials of the relevant government departments want to make things difficult for them, they can do it completely and these companies are within their jurisdiction. Dugan said that MEMC members would therefore prefer to adopt a more stringent control over their distribution channels to ensure that their agents do not sell counterfeit parts.

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