Counterfeit Auto Parts Issue Getting Attention

An article in the Wall Street Journal has brought increased attention to the issue of counterfeit auto parts.
"We’ve seen a significant uptick in the last two years," says Brain Duggan, director of international programs at the Motor & Equipment Manufacturers Association based in North Carolina, told the newspaper.
Brian Monks, director of anticounterfeiting operations for Underwriters Laboratories- a product-safety certification organization in the U.S.- told a MEMA conference on counterfeiting last October that global trademark counterfeiting totalled 5 percent to 7 percent of world trade, or $500 billion a year, with pirated vehicle parts accounting for about $12 billion dollars.
Last November, Tenneco launched raids on exhibitors at the AAPEX trade show in Las Vegas, Nev., citing trademark and patent infringement.
China is the leading source of bootleg car parts, but other counterfeiters include companies from Taiwan, India and South Korea, Duggan says. Tom Strohm, General Motors Corp.’s general director for marketing of service and parts, says bootleggers in China "target the most frequently used parts," including fluids, brakes, oil and fuel filters, spark plugs, batteries, and windshields. His colleague, Tony Bol, General Motors’ director of investigation for brand protection, says the company is "finding more products coming into North America." But Bol says, "The Middle East is the larger market for consumption."
Frustrated U.S. carmakers cite examples of brake lining made of compressed sawdust and of transmission fluid consisting of cheap oil doctored with dye. Pirates even produce box labels that look legitimate, making it almost impossible for consumers to tell the difference between knockoffs and authentic parts.
U.S. officials are voicing increasing concern about the problem. "Anything that can be produced in China can be counterfeited," Charles Freeman, the deputy assistant trade representative told a hearing of the U.S.-China Economic and Security Review Commission, a group appointed by Congress, on Feb. 5 Japanese and European vehicle-parts makers also are troubled by the growing counterfeiting trend.
European vehicle makers are anxious not only about revenue losses, but also about potential damage to their corporate brands, declining customer satisfaction and rising costs of providing warranty protection to parts they didn’t produce.
Another concern is legal liability for defective fake components. "If someone buys a copy and an accident happens causing injury, we could get dragged into a lawsuit," says Ed Zimmer, chief executive of Ecco of Boise, Idaho, which makes warning lights for commercial vehicles. "We’d have to prove it isn’t our product".
U.S. officials have protested to Beijing about vehicle-parts piracy, but say they haven’t made much headway. They also complain they don’t get all the support they need from U.S. companies to take action. Duggan says the companies are reluctant to go public because they fear negative fallout for their operations in China.