Andreas Mehlhaff Feb 6, 2020 5:51:44 PM 10 min read

Anti-Counterfeiting in the Automotive Industry

The counterfeit cabals are a driven bunch and their vast profits are being fueled by vehicular fakes. Learn how they’re attacking the automotive industry and what brands can do to defend themselves.

In our last few articles, we’ve covered how global counterfeiting rings have established a black-market economy that could be worth trillions of dollars in the next few years. From cash to collector’s item sneakers, there’s literally no product safe from these criminals. Today, I’m spotlighting one of the most lucrative ways they generate those profits: Infiltrating the automotive industry.

The focus of criminals in this branch of counterfeiting is mainly sourcing logistics and the distribution of spare parts. My focus as a brand and value protector is to offer insight on how the automotive industry can identify and be proactive against their unique risks.

 

The big fake with little parts

You’d be forgiven for asking “How do they fake a car?”  But those in the industry know that counterfeiters approach the automotive industry like they were “eating the elephant”— they do it a little piece at a time. An article by Sophie Peresson in the World Trademark Review provides a thorough look at the scale of the problem which, like the issue it spotlights, can be broken down into smaller parts.

Supply chain vulnerabilities are on the rise for legitimate automotive manufacturers, who lose over $2 billion annually to fake tire and battery sales, respectively. Counterfeit airbags, brake pads and engine consumables like oil and air filters can all spell serious injury or even death for a driver unlucky enough to install these fakes.

Like counterfeits in every other market, these products may look genuine, but they are utterly without value when put to the test. Counterfeit tires don’t grip roads, engines catch fire and seatbelts come undone. Take India as an example, where 20 percent of all vehicle accidents are the result of counterfeit parts.

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How this problem quickly became a pandemic

The flood of counterfeit items into the automotive sector is due in large part to the rapid proliferation of online sales platforms offering almost every vehicle component, with China responsible for 85 percent of the fake car parts flooding America. Many consumers are consistently fooled by the near-perfect packaging fakers employ and are often ignorant of the red flags, but there are also those who think a quick deal on a suspect part won’t hurt.

I’d remind such corner-cutting shoppers of the intricacy of the car as a machine — over 1800 separate components contribute to its operation, and they all are either manufacturer-generated or manufacturer-approved. That’s 1,800 ways counterfeiters could sell items which aren’t part of that sanctioned whole. The difference of a fraction of an inch on a tire tread or screw head may save consumers money but cost them their lives. 

 

Preventative security steps for the automotive sector

Thankfully, public awareness initiatives like the UK’s have been underway for some time, and bodies such as the Automotive Anti-Counterfeiting Council — a coalition of 11 of the Americas leading vehicle manufacturers — are working hard to bring greater attention to this deadly trade.

Since the online marketplace is such a hotbed for counterfeit sales, major e-commerce sites like eBay have taken steps to develop anti-counterfeit policies. Amazon’s is a particularly stringent example. Consumers may also report suspicious vehicle components to bodies like the Automotive Aftermarket Suppliers Association, which campaigns for greater awareness. 

The terrible potential for personal injury is a constant threat to the brand value and consumer faith in any counterfeit-plagued property. Here are three key ways you can defend your brand’s reputation:

 

  • Leverage supplier homologation:
    Also called a Certificate of Conformity, homologation strictly vets car parts to verify that they comply with regulatory standards. Organizations that have undergone this process may be trusted by manufacturers and consumers to produce parts that meet OEM specifications.

 

  • Protect production plants, processes and warehouses:
    Anywhere that vehicles are assembled or stored in part is an extremely vulnerable site. Counterfeiters who gain access to a factory floor and use illegal photography to hijack your intellectual property or outright steal original components for after-market sale or to be used as counterfeit templates. Secure these locations in every possible way.

 

  • Implement an end-to-end, multi-tiered security posture:
    Just as every component part of a vehicle must be protected, so must every stage of your own product’s lifecycle. Companies in the automotive industry require safeguards for the whole production process from conception and design to manufacturing, packaging and distribution.

 

Take counterfeiters off the road with U-NICA

Verification, brand value and product protection are at the heart of our scryptoTRACE® solution — a fully scalable, rapid-response answer to counterfeit concerns that addresses the entire product cycle. It’s been designed by a diverse and dedicated team to integrate smoothly with your existing processes and protect the integrity of your intellectual and physical property across regions and around the world.

You can connect with me directly for a demonstration of what scryptoTRACE® can do or feel free to click the contact link below for further information.

U-NICA is a team with a single purpose: Supporting you in the fight to protect your brand’s integrity and value. Our staff operates globally and partners with universities and agencies to deliver the future of brand protection. Connect with us for more information on our constantly evolving, open-solution suite.

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Andreas Mehlhaff

Worked in the last 13 years with renowned system suppliers and service providers within the RFID, government and semiconductor industries. In various positions in sales, product and project management. Contributed to the design and implementation of market-based identification and authentication solutions. In the previous position as head of product management he was responsible for the entire product portfolio of the business unit eGovernment and lead a large team of employees in Germany, USA and Thailand.

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