The greatest risk for the automotive components industry is counterfeit critical parts, such as brake pads and shoes, fuel pumps and suspension components, which put the lives of drivers and passengers at risk, says legal firm Spoor & Fisher.
Firm partner Paul Ramara tells Engineering News that the failure of critical components can lead to disastrous consequences and, with South Africa’s high rate of vehicle collisions and lack of decent research into these, concerns have been raised that counterfeit spare parts could contribute to an alarming percentage of accidents.
“According to the US Counterfeit Parts Task Force, counterfeiting represents a $12-billion-a-year problem for the global automotive industry,” he says.
Ramara points out that counterfeit spare parts operations in South Africa have increased significantly over the last few years. “The problem is the clandestine manner in which counterfeiters are operating, leading to minimal detection by authorities.”
Areas of Concern
Components that are frequently counterfeited are those that are easy to copy and can be used in a range of vehicles, thereby increasing their trade possibility.
“Nevertheless, the counterfeiters will copy almost any part for as long as there is demand for a particular spare part,” Ramara explains.
Compounding the issue of the illegal trade in counterfeit products is counterfeiters constantly becoming more skilled in copying genuine parts, further deceiving the end-user. “However, quality is the least of their concerns, with the aim being to ride on the back of original-equipment manufacturers (OEMs) and deceive consumers into thinking that they are buying a quality, certified part,” he says.
The first step an OEM can take to protect itself from being compromised by the availability of counterfeit parts is to register customs recordal notices – otherwise known as a Section 15 applications in South Africa – with the South African Revenue Service, Ramara suggests.
“It is an obvious fact that most of the counterfeit spare parts are imported from Asian countries, particularly China and, as such, the Sars customs department is the first line of defence against these parts entering the country.
“Owing to the covert manner in which counterfeit spare parts are dealt with, it is important that a customs recordal is supported by customs officials being properly trained,” he says.
Another important aspect is consumer training and awareness. “It is important that investigations be conducted in the open marketplace on a constant basis,” states Ramara.
“While I cannot comment on the automotive industry as a whole, these initiatives have been successful for the clients represented by Spoor & Fisher in the automotive sector,” he says.
A recent trend is that certain counterfeiters are registering trademarks with the South African Companies and Intellectual Property Registration Office.
It is, therefore, important for OEMs to have a proper intellec- tual property management system in place and to be vigilant, suggests Ramara.
“In instances where OEMs come across counterfeit goods in the marketplace, it is critical that a ‘search and seize’ operation is conducted, with the assistance of the South African Police Service and attorneys – preferably intellectual property attorneys who specialise in anticounterfeiting.”
He notes that these methods have proven to be successful.
In terms of the Consumer Pro-tection Act and the South African law of delict, a supplier or distributor of counterfeit goods could be held liable for cases where vehicle components have malfunctioned.
In terms of the South African law of delict, a person can claim compensation from another person for damage caused.
The elements of delict include harm done, wrongful conduct (on the part of the defendant – the supplier), the causal connection between the conduct of the supplier and the plaintiff’s harm, and fault on the part of the defendant (the supplier).
“One should not forget the cost of litigation in South Africa, which, in certain instan- ces, could leave the consumer out of pocket. Nonetheless, the consu- mer has recourse,” he concludes.