Post by Venturi on May 14, 2005 10:43:19 GMT -5
The automotive industry is just now on the edge of understanding the depth of action required to combat counterfeiting and product piracy, according to a new analysis from Frost & Sullivan.
Counterfeit and gray market automotive components represent as much as 3.2 percent of all global counterfeit trade and is rising rapidly, says Frost & Sullivan’s Mary-Beth Kellenberger. Their research determined that automotive parts counterfeiting is increasing at an annual rate of 9 to 11 percent (to 2008), which is 1 to 2 percent higher than the average.
A recent situation involving Metaldyne Corp. serves as proof. A Reuters report says that sales of the company’s replacement axle joints plummeted in key Eastern European regions last year, only to find out that a Chinese counterfeiter had muscled into the market. Metaldyne attempted to find the copycats but was unsuccessful, while Washington representatives continue to argue that China’s new anti-piracy laws have been poorly implemented.
Besides Europe, Kellenberger claims that North America is now seeing more counterfeit and gray market parts within its borders, causing an even greater bearing on the genuine parts makers’ bottom lines.
Brian Duggan, director of commercial and international affairs for MEMA, agrees that though it’s hard to measure criminal activity, the problem is being publicized more often. “In talking to our members, it is absolutely the case. More of them are talking to MEMA and to the press about the problem.”
The report from Frost & Sullivan suggests that counterfeiters proliferated by operating in peripheral markets that didn’t directly impact units, pricing or margins in core sectors of North America, Europe and Asia. Now, however, legitimate businesses in these countries are experiencing revenue impacts and are being caught off guard by fakes.
“File copyright and trademarks around the world,” Kellenberger recommends to suppliers, adding that manufacturers may also need to be more stringent with their associates by, for example, setting up exclusive warehouse distributor arrangements, which could change how this industry currently operates.
In the past year, the U.S. government has made powerful strides in curbing counterfeiting with its STOP initiative (which stands for Strategy Targeting Organized Piracy). A cooperative effort comprising the Department of Justice, U.S. Treasury Department, Department of Homeland Security and the Department of Commerce, STOP is trying to help U.S. companies establish their rights at home and abroad, explains Duggan.
The group even established a hotline so businesses can protect their intellectual property. “[Manufacturers] would detect counterfeiting but they weren’t really sure who to turn to,” says Duggan, who adds that the effort was to establish a single point of contact for all calls related to piracy protection. “An attorney for the U.S. Patent and Trademark office could get the facts and then put them in touch with federal law officials.”<br>In addition to the STOP initiative, the new research from Frost & Sullivan serves as a resource tool for aftermarket companies that may have already experienced counterfeiting, or those that have yet to, giving them a framework of knowledge to formulate a strategic action plan that will help deter crooked competition. “There are a number of manufacturers who are just on the cusp of seeing their parts counterfeit or gray market,” Kellenberger points out.
The research service will provide insight into business practices that have allowed this situation to flourish and pinpoint actions that are essential to protect future products and technologies.
Most counterfeit goods are still coming from China because they have “laxer laws and the social economic structure that supports counterfeiting,” comments Kellenberger. And it seems as if there is still little control at this point.
According to the book “China, Inc.”: “The larger truth is that the Chinese economy has staked a great deal on its counterfeiters. They provide the people with affordable goods. Often… counterfeit goods are essential goods, meaning that any government crackdown, in effect, taxes China’s needy consumers. Counterfeiters also serve their country by usurping foreign technology China desperately needs to meet its industrial goals. The counterfeiters give China’s growing number of globally competitive companies the means to compete with powerful foreign rivals who are forced to pay full fare for proprietary technologies,” states author Ted Fishman, who explains that counterfeiters in China limit truly advanced economies like the U.S. to sell valuable trademarked goods and technology to Chinese consumers who desperately want it but cannot produce it on their own.
Though many would like to cry foul at China since it currently serves as the No.1 producer of counterfeit goods, the problem will no doubt spread to other countries as companies move to different regions that offer low-cost production. “Counterfeiting will follow,” warns Kellenberger. And it seems it has. According to an article in gulfnews.com, police recently confiscated $10 million worth of fakes, of which $1 million were General Motors and Daewoo Motor goods, believed to be the biggest counterfeit auto parts raid in the Gulf.
Kellenberger, who serves as senior auto industry analyst, was alarmed to learn that many in the automotive industry (both suppliers to OEMs and aftermarket companies alike) have yet to develop a clarified action plan or strategy. Some don’t even have a designated budget for combating the issue. Duggan agrees with her observations, though he says, “It varies from company to company. Some do have pretty well established, sophisticated plans in place” but overall, Frost & Sullivan’s vantage “is consistent with what we have heard as well.”
Most experts suggest that this crisis requires serious manpower and money. Companies that have taken steps, in most cases, have only established an action team with one full-time employee and several volunteers.
Though the industry would like to think otherwise, “the prevention of [counterfeiting] is very much in its infancy,” says Kellenberger. “It’ll probably be 2008 before we see a strong group of companies with an established budget and action plan.”
“Many suppliers are still developing plans and trying to provide more resources to fight it,” agrees Duggan. As for 2008 being the turning point, he just isn’t sure. “I can say that this is not a problem that anybody is going to solve quickly. It has to be a long effort sustained over many years.”
Source:Aftermarket Business
Counterfeit and gray market automotive components represent as much as 3.2 percent of all global counterfeit trade and is rising rapidly, says Frost & Sullivan’s Mary-Beth Kellenberger. Their research determined that automotive parts counterfeiting is increasing at an annual rate of 9 to 11 percent (to 2008), which is 1 to 2 percent higher than the average.
A recent situation involving Metaldyne Corp. serves as proof. A Reuters report says that sales of the company’s replacement axle joints plummeted in key Eastern European regions last year, only to find out that a Chinese counterfeiter had muscled into the market. Metaldyne attempted to find the copycats but was unsuccessful, while Washington representatives continue to argue that China’s new anti-piracy laws have been poorly implemented.
Besides Europe, Kellenberger claims that North America is now seeing more counterfeit and gray market parts within its borders, causing an even greater bearing on the genuine parts makers’ bottom lines.
Brian Duggan, director of commercial and international affairs for MEMA, agrees that though it’s hard to measure criminal activity, the problem is being publicized more often. “In talking to our members, it is absolutely the case. More of them are talking to MEMA and to the press about the problem.”
The report from Frost & Sullivan suggests that counterfeiters proliferated by operating in peripheral markets that didn’t directly impact units, pricing or margins in core sectors of North America, Europe and Asia. Now, however, legitimate businesses in these countries are experiencing revenue impacts and are being caught off guard by fakes.
“File copyright and trademarks around the world,” Kellenberger recommends to suppliers, adding that manufacturers may also need to be more stringent with their associates by, for example, setting up exclusive warehouse distributor arrangements, which could change how this industry currently operates.
In the past year, the U.S. government has made powerful strides in curbing counterfeiting with its STOP initiative (which stands for Strategy Targeting Organized Piracy). A cooperative effort comprising the Department of Justice, U.S. Treasury Department, Department of Homeland Security and the Department of Commerce, STOP is trying to help U.S. companies establish their rights at home and abroad, explains Duggan.
The group even established a hotline so businesses can protect their intellectual property. “[Manufacturers] would detect counterfeiting but they weren’t really sure who to turn to,” says Duggan, who adds that the effort was to establish a single point of contact for all calls related to piracy protection. “An attorney for the U.S. Patent and Trademark office could get the facts and then put them in touch with federal law officials.”<br>In addition to the STOP initiative, the new research from Frost & Sullivan serves as a resource tool for aftermarket companies that may have already experienced counterfeiting, or those that have yet to, giving them a framework of knowledge to formulate a strategic action plan that will help deter crooked competition. “There are a number of manufacturers who are just on the cusp of seeing their parts counterfeit or gray market,” Kellenberger points out.
The research service will provide insight into business practices that have allowed this situation to flourish and pinpoint actions that are essential to protect future products and technologies.
Most counterfeit goods are still coming from China because they have “laxer laws and the social economic structure that supports counterfeiting,” comments Kellenberger. And it seems as if there is still little control at this point.
According to the book “China, Inc.”: “The larger truth is that the Chinese economy has staked a great deal on its counterfeiters. They provide the people with affordable goods. Often… counterfeit goods are essential goods, meaning that any government crackdown, in effect, taxes China’s needy consumers. Counterfeiters also serve their country by usurping foreign technology China desperately needs to meet its industrial goals. The counterfeiters give China’s growing number of globally competitive companies the means to compete with powerful foreign rivals who are forced to pay full fare for proprietary technologies,” states author Ted Fishman, who explains that counterfeiters in China limit truly advanced economies like the U.S. to sell valuable trademarked goods and technology to Chinese consumers who desperately want it but cannot produce it on their own.
Though many would like to cry foul at China since it currently serves as the No.1 producer of counterfeit goods, the problem will no doubt spread to other countries as companies move to different regions that offer low-cost production. “Counterfeiting will follow,” warns Kellenberger. And it seems it has. According to an article in gulfnews.com, police recently confiscated $10 million worth of fakes, of which $1 million were General Motors and Daewoo Motor goods, believed to be the biggest counterfeit auto parts raid in the Gulf.
Kellenberger, who serves as senior auto industry analyst, was alarmed to learn that many in the automotive industry (both suppliers to OEMs and aftermarket companies alike) have yet to develop a clarified action plan or strategy. Some don’t even have a designated budget for combating the issue. Duggan agrees with her observations, though he says, “It varies from company to company. Some do have pretty well established, sophisticated plans in place” but overall, Frost & Sullivan’s vantage “is consistent with what we have heard as well.”
Most experts suggest that this crisis requires serious manpower and money. Companies that have taken steps, in most cases, have only established an action team with one full-time employee and several volunteers.
Though the industry would like to think otherwise, “the prevention of [counterfeiting] is very much in its infancy,” says Kellenberger. “It’ll probably be 2008 before we see a strong group of companies with an established budget and action plan.”
“Many suppliers are still developing plans and trying to provide more resources to fight it,” agrees Duggan. As for 2008 being the turning point, he just isn’t sure. “I can say that this is not a problem that anybody is going to solve quickly. It has to be a long effort sustained over many years.”
Source:Aftermarket Business