Suppliers and sellers of counterfeit automotive parts are becoming increasingly sophisticated in their tactics to pass off fake goods as legitimate and avoid detection, says an expert in the trade.
Alexander Liske, a board member on the Brand Owners’ Protection Group (BPG), Automotive Cluster, as well Ford Motor Company’s brand protection manager in the Middle East, says that with warehouses and retailers having been targeted by the Ministry of Commerce and other authorities, sellers of counterfeit goods are becoming more sophisticated.
Parts may be kept unbranded in a warehouse, and only once an order has been placed will the fake branding be applied.
“Counterfeiters are getting clever, they are not putting everything on the shelf as if at Carrefour, they know that some brand owners are very active.
“They keep the counterfeit parts at a separate warehouse. If there is a raid, police often won’t be able to seize the parts because they won’t be branded yet. They are very cautious.”
With digital scanners and printers getting better, it is also easier for the scammers to make packaging and labels that look like the real thing says Liske.
Another tactic used by retailers is to have genuine parts on hand as display models, which will be shown to prospective customers to demonstrate that real parts are being used.
Once the order for part is is placed, the fleet of trucks sent for servicing will then be fitted with fake parts.
Retailers of counterfeiter parts also will often shop for parts with local dealerships, just for the sake of having invoices in case the Ministry of Commerce comes in for a raid says Liske.
“As brand owners we encourage the Ministry of Commerce and law enforcement agents to pay attention to the date of the invoice. If it says five oil filters and the date is one year ago, with filters being a very fast-moving spare part, it just doesn’t make sense that the same filter would be sitting on the shelf for one year.”
There is no exact figure for the worldwide trade in counterfeit automotive parts, but it is estimated that $16 billion worth of fake parts are sold annually.
At the extreme end of the spectrum, counterfeit parts can cause crashes resulting in loss of life. At a more prosaic level, counterfeit parts can fail early and contribute to engine wear and tear, possibly resulting in costly machine repairs.
While exact impact on the market is impossible to know, Liske says that it varies across the different brands.
Counterfeiters watch the market, and target those brands which are most popular, particularly those with double-digit market share.
They are most likely to target fast-moving parts, those parts which require frequent replacement, including oil and air filters, spark plugs and brake pads.
Service parts are generally simpler for the counterfeiters to manufacture, compared with more complex parts like an alternator.
Liske says that with less complicated parts such as filters, counterfeiters will bet on making profit through volume rather than margin, and are capable of sending “hundreds of thousands of them on a weekly or monthly basis into the region”.
With more complex parts, counterfeiters can make a large margin, but Liske says the quality will be very poor.
Commercial vehicles are a target in part because they have more frequent service intervals due to heavier use.
Liske, who has been working in the brand protection field in the Middle East for almost six years, says the scope of the problem has reduced, particularly due to the automotive brands’ efforts to educate businesses on the danger of illicit parts.
He says that the group has taken apart seized fake parts, and what they have seen is ‘not pretty’.
“Counterfeiters don’t care about the material, they only try to make the part and the packaging look the same on the outside, and fit the vehicle or the truck.”
While the vehicle brands and authorities are dedicated in the fight against illegal parts, ultimately the responsibility for avoiding counterfeit parts lies with the end user says Liske, and businesses must ensure genuine parts are used in servicing.
