Thursday, February 17, 2011

China falling victim to counterfeit parts trade

  • USD45 billion worth of parts expected to come out of China this year  
  • Report says Malaysia contributes two per cent to global auto counterfeit market

China is synonymous with counterfeiting and now the chicken has come home to roost and it may choke the local automotive industry.

Counterfeit parts are not just costing the industry their profit but could also cost the country in terms of lives.

According to Automotive News China, the country is ill equipped to deal with counterfeiting and some industry insiders say that the situation is the result of years of turning a blind eye to the problem.

Counterfeit parts dominate the high volume replacement market for spark plugs, brake pads, oil seals and even steering components and airbags.

The scale of counterfeiting in China is simply mind boggling, one particular factory is said to be capable of producing 10 million counterfeit oil seals a year and it continues to grow in capacity despite the fact that it is shut down once a year by the authorities.

Counterfeit oil seals use low grade rubber and steel and like other copycat parts, they are almost guaranteed to fail.

To combat the menace, some China OEM manufacturers are marking their components with radio frequency tags to differentiate themselves from the fakes.

It is estimated that the People’s Republic accounts for 83 per cent of the world’s counterfeit parts followed by Thailand and Taiwan taking five per cent of the pie while Japan and Malaysia is responsible for two per cent each.

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