June 15, 2012: Arvind Kapur, President, ACMA
The president of the Automotive Component Manufacturers Association of India on the menace of spurious auto components, the loss to the government and the various measures being taken to contain the problem.
ACMA has been driving the Asli-Naqli campaign against spurious parts. How successful has it been in creating awareness?
ACMA has been spearheading various special initiatives to increase public awareness on the menace of counterfeit parts and the danger to life and property by using such components. About 36 percent of the parts sold in the replacement market are counterfeit products and around 20 percent of all road accidents in India are directly or indirectly attributed to the use of these parts (as per an ACMA–E&Y study). At Auto Expo 2012 in New Delhi earlier this year, the Asli Naqli pavilion had an IPR Cell to safeguard the Intellectual Property Rights of exhibiting companies against display of their counterfeits or imitations. An aggrieved party could approach the IPR cell and seek advisory for action against an infringing exhibitor company at the event itself. The pavilion had 16 leading component manufacturers participating, with their representatives educating visitors on the dangers of using counterfeits and informing them on how more and more fake components have been finding their way into the replacement market – where retailers sell parts to replace factory-fitted ones. In the recent past over 500 raids have been conducted through the common raids programme under the aegis of ACMA and the association is further garnering support from its membership to strengthen this initiative.Common raids, Asli-Naqli shows and SMS campaigns are now an ongoing feature of the ACMA Consumer Affairs Committee.
How much does the government lose due to the sale of fake parts?
As per industry primary research findings, counterfeit sales result in a loss to the government exchequer to the tune of Rs 31 billion per annum. The loss occurs because firms involved in manufacturing of fake parts do not pay taxes. Laws and enactments are there but there are limitations in the existing laws and industry strongly recommends amendments to the Motor Vehicles Act.
Which are the most replicated auto components?
The components most susceptible to counterfeiting are filters, bearings, steering arms, tie rods, brakes, brake linings, bumpers, alternators, wipers and lamps.
In which region of India is the problem of fake parts most intense?
The North and the West.
Which are the companies that are playing a key role in ACMA's anti-counterfeiting campaign?
Bosch, Elofic, Federal-Mogul, GKN Driveline, Lucas Indian Services, Minda, Talbros, QH Talbros and Western Liners are some of the companies that participate in the Asli-Naqli shows.
How can the flow of fake parts be stemmed?
With fast-growing vehicle penetration in the top 100 cities, and with a rapidly evolving aftermarket, it is expected that by 2017 the market share of the OEM-authorised network of service stations will grow to around 20-30 percent from the existing 15-25 percent; that of multi-brand organised service chains to 5-10 percent from 1-2 percent. Semi-organised service centres accounting for 10-20 percent of the market today will account for 20-30 percent in 2017 while the share of unorganised garages will drop from the current 60-70 percent to 45-55 percent. Only a small portion of vehicles in India are serviced by OEM-authorised service centres; the rest by organised, semi-organised and a large number of small unorganised players. To ensure better quality of service for the customer, a process of accreditation needs to be devised and basic minimum standards for aftermarket players in each product / component category be defined. Further, communicating to end-users the benefits of high-quality components is necessary to create a pull for branded and quality assured products and components.The geographical spread and the sheer diversity of components along with specialised requirements for slow-moving parts and sub-assemblies poses one of the greatest challenges in devising efficient logistics. Distributors, retailers and stocking garages will need training and education on scientific inventory management, deployment of IT systems and professional management. This will, in turn, necessitate hiring a range of IT-capable manpower – salespersons, sales managers, warehouse personnel, mechanics, service supervisors, service managers, service advisors and IT-support staff.
How can ACMA and SIAM together strengthen anti-counterfeiting measures?
Both the industry associations have called for immediate Government interaction for amendments to contain sale of counterfeits. They have sought the Centre’s intervention for amendments in the existing legislations particularly the Motor Vehicles Act. The Act should not only regulate completely assembled vehicles but equally apply to components used or intended for use in vehicles including those sold in the aftermarket.
After raising USD 15 million from the Al Futtaim Group, River India plans to ramp up its manufacturing facilities and di...
The importance of India as a strong export base for auto parts suppliers is increasing, says Anil Kumar M R, President a...
In an exclusive interview, Radha Krishnan, President and Founder, Detroit Engineered Products (DEP) talks about how the ...