Is your service department unwittingly installing counterfeit parts on customers' vehicles?
Think it's impossible, because certainly you, your experienced parts manager and trained service technicians know the difference between a real McCoy and a phony?
Counterfeiters package fake auto parts today in packaging as splendid as original equipment manufacturers (OEMs) do. Consider the case of fake brake pads. The box in which the parts are packaged looks exactly like the original AC Delco package. The problem: the packaging, the part and the pad friction material are all fake. The pads are made of sawdust!
Consider a fake oil filter. It and its packaging look exactly like the OEM's, and the filter probably actually works for a while, but cut the filter casing in half and inside is the big difference — the fake part has substantially less filtering material than the OEM product.
Today's fake auto parts are so cleverly manufactured and packaged that even the OEMs sometimes can't tell the counterfeit part from their own, notes Paul Foley, vice president of the Automotive Aftermarket Suppliers Assn., Research Triangle Park, NC.
The association estimates that counterfeit automotive parts are a $12 billion global problem — a $3 billion problem in the U.S. alone. While Foley can't estimate the impact of the problem to new-car dealers, he says they need to be watchful to avoid becoming a victim of this crime.
“A $4 fake oil filter that makes its way into the dealership, and is installed on a customer's car can lead to costly engine repairs,” he says. “These parts are being sold all through the retail channel, from car dealerships to independent garages, retail auto parts stores — wherever the counterfeiters can place their product. Counterfeit auto parts are the crime of the 21st Century.”
The best security against counterfeit auto parts affecting the reputation and financial well being of a dealership is that old axiom: If it seems too good to be true, it probably is.
Beware of jobbers and others who appear at the parts counter offering great deals on “OEM” replacement parts. Counterfeiters even put real-looking counterfeit-protection hologram seals on their parts and packaging to further deceive.
“The tell is these fake parts' price,” Foley says.
Fake parts are often priced at least 25% below the OEM price — an attractive incentive to parts managers pressured to improve results or body shop managers feeling pressure from insurers to use cheaper aftermarket parts.
Buying and installing fake parts can cost a dealership dearly. A pending new federal law makes the party installing fake auto parts responsible for any resulting liability.
Says Foley: “All dealerships have their parts suppliers — AC Delco, Motorcraft, Mopar and the like — and fake auto parts can filter into the dealership parts channel through these sources because these OEM suppliers have suppliers who supply them.
“Dealerships have to be on the watch all the time. If someone comes by from a supply chain you are not familiar with, and they want to sell you parts at discount it is your responsibility to ensure the parts are not counterfeit.”
If you, your parts manager, service manager or technicians identify fake auto parts or even suspect that parts might be counterfeit, Foley suggests contacting your supplier and your OEMs.
The Automotive Aftermarket Suppliers Assn., Motor and Equipment Manufacturers Assn., U.S. Department of Commerce and Department of Homeland Security are trying to educate consumers, installers and OEMS about the risk of counterfeit goods and the financial and welfare risk the bogus stuff presents to the supply chain, retailers and consumers.
The Department of Commerce is involved because the counterfeiting involves misuse of intellectual properties, such as OEM logos. The Department of Homeland Security is involved because the revenue from the sale of counterfeit goods is thought often to help finance terrorism.
Foley notes that many of the overseas entities that once produced fake prescription drugs (now more stringently policed and more easily detected) have turned to auto parts, which are more profitable and less risky venture for them.
“Some of these fake auto parts actually work,” Foley says, “and can work as long as OEM products, in some cases.
“However, this is not the same scenario as buying a fake Rolex watch or Coach handbag. It is more on par with counterfeiting prescription drugs; what is being sold to you and what you are putting on your customers' vehicles can put human life at risk.”