Counterfeit auto parts flood China's aftermarket

Despite repeated attacks by the police and the government, the production of illegal counterfeit auto parts is still banned, accounting for about 20% of the Chinese aftermarket.

According to estimates by Frost & Sullivan Consulting, the global sales of counterfeit auto parts are estimated to reach 45 billion U.S. dollars (307 billion yuan), which is several times more than the 82 billion yuan in 2008. What is more, according to the Japan Automobile Parts Association, 83% of counterfeit products in the world are located in China.

Taiwan and Thailand account for 5% of global counterfeit auto parts, and Japan and Malaysia account for 2%.

Counterfeit auto parts are generally after-sales products with large demand, such as spark plugs, brake shoes and steering parts.

Alex Ashmore, head of TRW Asia-Pacific aftermarket, said that fake brake pads and brake discs have taken away at least 20% of TRW's business.

Some counterfeiting companies also produce technically complex parts. Ashmore said: “We have also found counterfeit airbags in China.”

Corteco China's annual sales of oil seals in the Chinese market accounted for 5% of the 30 million aftermarket oil seal market, but the company's Vicky Chan said: "If there is no counterfeit product, our oil seal can account for 25% of the market share."

Corteco's oil seal costs $45, but counterfeit seals cost only $20. The use of low-grade rubber and metal for counterfeit oil seals can cause leakage of oil and make the car performance unstable.

Last year, the government shut down a factory in Guangzhou that produced counterfeit Corteco oil sealers.

Fake factories have been active in the market for nearly a decade. Chan said: “We shut it down every year and they soon reopened.”

In 2008, counterfeit factories can produce 7 million oil seals per year. This year, the seal capacity of counterfeit factories has reached 10 million.

Countermeasures In order to crack down on counterfeit parts, suppliers began to tag their products with radio frequency identification tags. According to Ashmore of TRW, “90% of our product packaging will be tagged this year.”

Suppliers also formed quality brand protection committees to fight counterfeit products. The committee worked with the government and the police to crack down on counterfeit factories.

But even if the police shut down a certain factory, it is just a fake part of the production site.

Skymore’s Ashmore said: “All counterfeit companies are now 'smart' and they have 3-4 trading companies.”