Wally Edgar Chevrolet-- Counterfeit Parts Flood China's Aftermarket

Feb. 10, 2011 - PRLog -- SHANGHAI -- Despite police raids and government crackdowns, production of illegal counterfeit auto parts is so widespread in China that it has fueled a global boom in the trafficking of bogus aftermarket components.

Worldwide, counterfeit parts will generate sales of $45 billion (307 billion yuan) this year, up from 82 billion yuan in 2008, estimates the consulting firm Frost & Sullivan.

As much as 83 percent of those components are produced in China, according to the Japan Auto Parts Industries Association. Taiwan and Thailand account for 5 percent each of global production of counterfeit parts, while Japan and Malaysia each account for 2 percent.

Counterfeiters typically copy high-volume aftermarket products such as spark plugs, oil filters, brake pads and steering parts.

TRW Automotive has lost as much as 20 percent of the Chinese market to counterfeit brake pads and rotors, says Alex Ashmore [pictured], the company's Asia-Pacific aftermarket director.

But some counterfeiters also produce technically complex parts. "In China, we've found fake airbags," Ashmore said.

Crackdowns fall short
Corteco China Co. sells 5 percent of the 30 million aftermarket oil seals sold annually in China.
"If there were no [counterfeit] oil seals, we would have a market share of 25 percent," says Corteco's Vicky Chan.
Corteco's oil seal costs 45 yuan, but a fake oil seal costs just 20 yuan. The counterfeit seals use low-grade rubber and metal, which causes leaks and makes the car unstable, Chan said.

Last year, authorities shut down a factory in Guangzhou that produced fake Corteco oil seals.
The counterfeit plant has been active in the market for close to ten years. "We close it every year and they re-open," says Chan.
In 2008, the counterfeiter had the capacity to produce 7 million oil seals annually. This year, the operator of the counterfeit plant has raised production capacity to 10 million oil seals, Chan said.

Countermeasures
To counter fake parts, suppliers are starting to mark their products with radio frequency identification tags. Sometime this year, "90 percent of our boxes will have the device," says TRW's Ashmore.
Suppliers also have formed the Quality Brands Protection Committee to fight counterfeiters. The group works with government and police to shut down counterfeiters' factories.
But even if police shut down a factory, it is often only one branch of the counterfeiter's total production.

"All the counterfeiting companies are very savvy now," says Ashmore of TRW. "They all have 3 or 4 trading companies."

SOURCE: Auto News China

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