FEATURESTORY
Breaking the chain works in central and western China, and counterfeit production is
As a general trend, the last few years have seen brand holders now diversifying away from the eastern coastal belt.
expanded or develop in-house resources in China dedicated to Warehouses of illegal China-made car parts have even been
anti-counterfeiting. Companies that are frequently infringed target traced to Dubai and Saudi
counterfeit manufacturing plants in order to close down the sup- Arabia, while Chinese Cus-
ply chain at source. The window for achieving this is, however, toms has also seized car
increasingly short.
Legitimate
parts destined for Benin,
One of the most infringed areas is the auto industry, with some
manufacturers
which functions as a trans-
auto and auto parts companies conducting hundreds of cases shipment or entry port for
per year in China. Given that global counterfeiting of car parts is
are not the only
West African trade.
estimated to cost the industry around USD16 billion annually, this ones seeking to The counterfeiting of
may be a drop in the ocean.
take advantage
auto products is now so en-
The illegal car parts are usually routine replacement items like trenched that the Automo-
oil, fuel and air filters, brake pads and sparkplugs, but factories
of lower wages,
tive Industry Working Group
in China have increasingly been found to produce less-obvious,
land prices and
of the Quality Brands Protec-
more technically complex parts in large numbers. “These opera-
tions are increasingly well organized. The counterfeiters have
new supplier
tion Committee, “which in-
cludes representatives from
learned a lot from experience,” says Ewen Turner, Manager In- networks in Bosch, BMW, Bridgestone,
vestigations, Asia Pacific for GM Global Security.
central and
Denso, Ford, Gates, Mahle,
The counterfeit car parts manufacturers are mostly centralized Peugeot-Citroen, Volkswa-
in China’s traditional auto/auto parts producing regions, notably
western China.
gen and ZF,” organized a
Guangdong, Fujian, Jiangsu and Zhejiang provinces – to take ad- joint IPR Protection Booth at
vantage of established supply chains. An emerging trend, mir- the Automechanika Shang-
roring other areas of manufacturing in China, is a gradual move hai exhibition last December. The booth presented showcases of
inland. Legitimate manufacturers are not the only ones seeking to genuine and fake parts and distributed leaflets with the message
take advantage of lower wages, land prices and new supplier net- “Cherish your life - say a clear NO! - to fake parts!” while showing
10
ways to fight piracy
in China
F
rom an article by Henry Blodget -- a former golden
boy tech stock analyst now barred from the securities
Don’t do China joint-ventures, which function as
industry for alleged wrong doing in the internet bubble.
5
a siphon tube through which local entrepreneurs
We figured his unorthodox background might offer some value.
suck out ideas, technology, and products.
First, recognize that the value (or at least life span) of
Design your products to have shorter life cycles,
1
intellectual property may be less in the future than it
6
thus leaving pirates stuck with warehouses full of
has been in the past.
outdated stuff.
Crank up the litigators, making it painful for pirates to
7
Cut prices, making piracy less profitable.
2
fake your products and thus encouraging them to rip
off someone else.
8
Give away technology in hopes of establishing a
standard that you can control.

3
Redesign business processes to make it more difficult
to steal stuff, and consider what you do lose a cost of
9
Offer local pricing: Don’t force people who make
doing business.
$1,000 a year to pay $250 for an office suite.
4
Pay for your own enforcement raids.
10
Shift to a service/support model, and give your
products away for free.
www.chainaonline.com MAY/JUNE 2009 35
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