Countering the counterfeiters

The cost of a Rolex watch can be as high as $20,000. It can also be about $50. Of course, the former is the price for a real Rolex, while the other is the price for a fake. Anyone…and I do mean anyone…who is trying to buy a Rolex for $50, of course, knows what they are buying.

Likewise, in the auto parts business, distributors buying auto parts at “too good to be true” prices know what they are doing. There’s no way they can confuse sham pricing with legitimate pricing, no matter how great the promotion or how deep the discount. At one-third the cost of real parts, counterfeit purchases can hardly be an honest mistake.

The common defense for buying counterfeit parts is that they look like the real parts and they are packaged like the real parts. It’s true that in many cases, the knock-offs are dead-on duplicates in appearance, but again, they don’t have real pricing! So, save your explanation and excuses for taking a deal “you couldn’t pass up” — whether you want to believe it or not, you probably have committed a crime.

Once the parts are sold to installers, who also might be lured to take an unbelievable deal, the plot thickens and the consequences worsen. These parts, that are not up to the manufacturing standards of legitimate parts, can be dangerous. In fact, Gulf News, has reported that half the fatalities on Saudi roads are the result of fake parts. Surprising? Not when you think that brakes or brake lines could be made with inferior materials or airbags that won’t deploy. 

Although the distributors and shops who buy sham parts are complicit in the accidents that occur, there are many distributors and shops who are buying sham parts unwittingly. It’s the ultimate insult to aftermarket parts distribution when distributors get duped and pay legitimate prices for illegitimate goods and sell them to unwitting shops who unwittingly install them on their customers vehicles.  

Of course, any amount of counterfeiting is a problem, but it’s almost become and epidemic in the UAE where, according to Dubai’s Brand Owner’s Protection Group, one in three cars are fitted with counterfeit items. The reason for this is probably because the UAE is one of the fastest growing markets that by definition needs an influx of competitive parts. Attempting to meet market demand, however, is no excuse to put imitation parts into circulation.

Companies that manufacture fake parts in an attempt to pass them off as originals have no regard for law, morals and ethics. Their nefarious actions are an affront to intellectual property laws, a blatant attempt to avoid taxes and the total disregard for public safety.

Ultimately, these criminal actions affect the entire parts distribution chain. When motorists are faced with a fairly high probability that they might buy counterfeit parts from a retailer or e-tailer, or have them installed by a shop, they may shun the aftermarket and opt to deal solely with dealerships that are supplied directly from their OEMs.  

Solving this issue will not be easy. At the very minimum, distributors need to think only in terms of buying from well-known, reputable manufacturers. Likewise, shops need to buy from the same kind of distributors.

Unfortunately, even the most virtuous and vigilant distributors and shops are not safeguarded. The counterfeit parts business is so big and lucrative that the criminals have found ways to infiltrate the distribution system by using diverse and convoluted methods of entering the marketplace, including the shuffling of products from country to country creating a paper trail so long that the country of origin is lost in the mix. Of course, the chosen countries on such a route have few import restrictions making the deception even more effective. 

No one has an answer to solving this problem. In fact, it may be a victory just to keep the problem from getting bigger. All sorts of measures, including RFID technology, laser coding, holography, taggarts and specialty inks can be used by manufacturers to protect their products.  But there is a catch — any of these measures used in part or together, drive up the cost of their products.

Because manufacturers have not implemented every anti-counterfeiting precaution across the board, it seems like they may have settled for viewing the counterfeiting of their parts as something they accept and plan for much like they plan for inventory shrinkage. This may be for the simple reason that distributors don’t want to pay higher prices and, in many cases, are willing to take “the deal” no matter the consequences.