Counterfeit auto parts, a big threat for the automotive industry in India

According to media reports, counterfeit auto parts industry in India has reached to a value of around Rs 22,000 crore leaving behind car and bike sales in the last five years. In India, some of the most commonly counterfeited auto spare parts include brake pads, spark plugs, lamps, cables, alloy rims, grills, filters etc.

Cheap auto components don’t just damage your vehicle but are also a threat to your life.

Around 20% of road accidents in India are caused due to fake automotive parts- FICCI CASCADE

The FICCI report also states that fake auto parts led to a revenue loss of Rs 2,200 crore to the government in the past years.

Negative impacts on the automotive industry

No wonder, counterfeit auto parts have many negative impacts including accidents and even death. Remember, the idea of deliberately buying a fake & cheap auto part may cost your life. Fake auto parts usually break down or malfunction without a hint. For example, a fake brake pad may fail in an emergency situation and may lead to a fatal accident.

Counterfeit auto parts also lead to major revenue losses for manufacturers every year. Besides, they also overburden the manufacturers with extra costs for fighting fakes. Along with consumers and manufacturers, the government loses a large amount of taxes due to the sale of counterfeit auto parts. Quite evidently, huge evasion of taxes is a bane for the country’s economy.

Solutions to prevent counterfeiting

Holostik is an industry leader in providing anti-counterfeiting solutions for the automotive sector. Its vast range of anti-duplication products combined with IT-enabled solutions helps to secure the products and supply chains. Holostik’s approach of catering customised anti-duplication solutions had shown effective results for automotive companies.

The auto component after-market reached to a staggering value of Rs 67,491 in 2018-19 crore however, the counterfeit market is also growing at a fast pace. In such a scenario, diligent use of anti-counterfeiting solutions can prevent counterfeiting by securing products and supply chains at the same time.

To know about our anti-counterfeiting & IT-enabled supply chain solutions, call us on +91–785-785-7000 or drop us a mail at connect@ec2-54-210-245-44.compute-1.amazonaws.com

The ill-effects of counterfeiting on the auto-component industry

For the past few decades, there has been an unprecedented rise of counterfeit automotive parts in the automotive industry. The trend not just jeopardizes the health of the consumers but also brings down the growth of the manufacturers. Of late, authorities from across the world have seized huge amount of counterfeit automotive parts at different stages of the supply chain.

A large amount of such counterfeit automotive parts, confiscated by officials, are from China. In the last few years, the trade of counterfeit auto parts has jolted the automotive manufacturers across the world.

According to a report by FICCI on Illicit Trade, “The Indian auto component industry suffered a loss of INR10501 crores in 2014 due to grey market which increased from INR 9198 crores in 2012.”

Market experts cite various reasons behind the growth of counterfeiting in the automotive industry which include, ease of manufacturing, packaging and import of products, higher margins on the sale of counterfeit automotive parts, uninformed customers buying counterfeit automotive parts, availability of technology to copy products, lower cost of duplicate product and short replacement cycle of some products.

Due to the above-mentioned reasons there has been an exponential growth in counterfeiting of automotive parts and has deeply troubled the automotive industry, government and last but not least consumers. Let’s discuss these impacts in detail:

Impact on manufactures: Automotive manufacturers have to bear the brunt of counterfeiting. The sale of counterfeit automotive parts brings down the sale of genuine products drastically. Moreover, there is a loss to the image of the manufacturers due to faulty and poor-quality cheap products.

Impact on government: The Indian government lost INR 3113 crores in the year 2014 compared to INR 2726 crores in the year 2012. The government suffers a huge amount of losses due to evasion of taxes by forgers or counterfeiters.

Impact on consumers: Did you know that 20% of traffic accidents are caused by counterfeit automotive parts? The figure was revealed by Automotive Component Manufacturers Association (ACMA) a few years ago. So the most diabolic impact of counterfeit automotive parts is that it plays with the life of consumers.