Counterfeit parts continue to be a problem within the trucking industry, as well as in other industries, and it is a situation that will continue. According to US Immigration and Customs Enforcement, “parts counterfeiting has increased in magnitude and complexity, costing industry billions of dollars, as well as posing safety risks.” More than 14,000 counterfeit parts were seized last year — a 67% increase over 2005. Nevertheless, measures can be taken to avoid counterfeit parts and the liability issues that often come with them.
These matters were the subject of a panel discussion, “The Truth Behind Counterfeit Parts,” during the Commercial Vehicle Solutions Network (CVSN) annual business forum, in Baltimore, Maryland. CVSN is the largest association of independent aftermarket distributors serving the commercial vehicle industry.
Participating on the panel were Dominic Grote, vice president, sales and marketing, Grote Industries; Brad Van Riper Sr, vice president and chief technology officer, Truck-Lite; Chuck Kleinhagen Sr, vice president, head of technology, Haldex; and Andrew Cifranic, brand manager, Bendix Commercial Vehicle Systems. Moderating the panel was Wayne Keller, president, Keller Truck Parts.
Beginning the session, Keller said there is nothing wrong with imported parts, provided they are brought in from reliable sources. The key is to be able to distinguish counterfeit parts — also referred to as knockoffs, will fits, and copycats — from genuine parts. No easy task because it is often difficult to distinguish between a genuine and a counterfeit part.
The overall message echoed by each of the panelists: The quality of a product cannot be determined by visual inspection.
A common thread among importers of counterfeit, non-compliant parts, especially those manufacturing lighting products, is that they have no North American manufacturing facilities or domestic quality control, said Grote.
“They do very little to no engineering, and use ‘China-grade materials’ — materials that have wide variances in quality,” he said.
He noted that just over the past several months there have been recalls of Chinese-made car fuses that don't blow when they should and could cause fires; Chinese-made light truck tires that contained “unauthorized material” in the sidewalls and might come apart; toothpaste made in China containing diethylene glycol, a substance used in antifreeze; and a third global recall of Chinese-made toys for Mattel because they contained hazardous levels of lead paint.
“All of these are safety issues,” Grote said, “stemming from standards and requirements not being met.” This is particularly important for lighting because of compliance safety issues associated with the brightness of a lamp and distance visibility.
Many counterfeit parts producers don't bother to go through compliance performance requirements, he said. There is no “due care ” — an understanding between the US government and vehicle equipment manufacturers that appropriate actions will be taken to ensure their products are in full compliance with the minimum performance requirements of all applicable Federal Motor Vehicle Safety Standards.
All North American manufacturers are self-certified, said Grote.
The problem of non-compliant lighting is worsening, said Truck-Lite's Van Riper, as more new electronic-based suppliers are entering the market with limited understanding on the need for compliance, little understanding of the “self certification” process, and no use of due care.
The National Highway Traffic Safety Administration (NHTSA) has recognized the problem of non-compliant products and is increasing its enforcement activities, he said. The agency has identified 44 different non-compliant products entering the market last year with recall campaigns.
To help parts buyers know they are getting a compliant light, members of the Motor & Equipment Manufacturers Association (MEMA) and the Transportation Safety Equipment Institute (TSEI) are voluntarily marking their products, which also helps provide traceability even when packaging is gone.
“A lack of marking is what we see on China-grade products,” Van Riper said. “It makes enforcement nearly impossible because there is no traceability to the supplier or manufacturer. No markings on lamps allows them to avoid accountability for quality issues, compliance or performance problems, and safety concerns.”
It used to be that the traditional competitors in commercial truck brake products were those who had experience in commercial vehicle braking, particularly in the North America market, and produced their own designs, said Kleinhagen of Haldex. These companies had application engineering knowledge and a large experience base from working with fleet and OEMs.
“They understood design tradeoffs between the dimensions of the parts, the materials used for those parts, and the manufacturing processes,” he said. “It takes all of those in combination to produce a part of equivalent quality to another part. And these products, typically before ever being released, were subjected to rather extensive laboratory and field validation testing that went beyond the industry recommended practices.”
Then about 10 to 15 years ago, copycat, cloned, and will-fit products started entering the market, from manufacturers with little application experience, said Kleinhagen. Rather than developing their designs, these companies merely reverse-engineered dimensional copies, usually made without much interaction with fleets and OEMs, using inferior materials and processes, and with minimal validation testing. They figured they were copying someone else's design, and that company already did the validation testing.
“Part performance is not just a function of what the dimensions are,” Kleinhagen said. “As an extreme example, a part made out of pine and another part out of steel can have dimensions that are identical, but the parts aren't going to perform the same. This lower-than-expected quality compromises road safety for everyone and can lead to higher maintenance and out-of-service costs, with no support from the manufacturer.”
One of the challenges for parts customers, added Bendix Commercial Vehicle Systems' Cifranic, is that “appearances can be deceiving. Parts may look the same, but they perform quite differently, and counterfeit parts can cause problems with not just performance, but more importantly, can create safety problems.”
It is incumbent for parts buyers to become more educated consumers, he said. Furthermore, they need to understand the difference between genuine and counterfeit parts, become aware of the consequences of using counterfeit parts, and learn what they can do to protect themselves.
“When you buy genuine, you get support from companies that stand behind their products and provide after sales, service, and field engineering support,” said Cifranic. “You also get expertise that comes with years and years of experience from constantly striving to improve the product to better perform and meet customer needs.”
With genuine parts, there also is protection from liability, something that doesn't come from counterfeit parts manufacturers. Often, a distributor is held liable on product reliability and safety issues.
Time was the manufacturer of a product was the sole responsible party, said Van Riper. “But now in this global market, it is either the actual manufacturer of the device or the importer of the product.
“In the case of products imported directly from another country, the distributor or the purchaser of the product is the first entity in the US or Canada and is declared responsible for the compliance and product liability.”
All of the panelists agreed that under the doctrine of strict tort liability in the US, any seller of a product, and not just the manufacturer, is liable for losses, injury, or damage caused by a defective product. The fact that a distributor didn't create the defect, take part in the design or production of the product, or produce any product instructions or warnings, is no defense.
To avoid problems that may come with using counterfeit parts, the four panelists offered this advice:
Buy from a trusted source; reliable, established companies.
If you are not familiar with a parts manufacturer, request evidence of due care, ask for copy of self certification for its products, and ask about product compliance testing and reports. “These kinds of things will flush out the good guys from the bad guys,” said Grote.
Look for product markings on packaging, literature, and products.
The old adage, “If it seems too good to be true, it probably is,” is true. Virtually all major OEMs are global in both supply base and production. It is extremely unlikely that a counterfeit parts manufacturer can produce the same product at a lesser cost unless it is taking shortcuts on materials and processes, and that results in products of inferior, inconsistent quality.
In summary, Kleinhagen said distributors are the real key to controlling parts counterfeiting because counterfeiters have no distribution of their own and no brand equity.
“Distribution channels in the commercial vehicle market are pretty short and transparent,” he said. “Most manufacturers in this market don't use third parties between themselves and the North American distributor base. So if you're buying products from someone other than a manufacturer, it's probably not genuine.”