Motor Industries Company (MICO), the Bangalore-based subsidiary of auto component major Robert Bosch, through the help of Chinese law enforcement and investigation agencies, initiated a raid of a large-scale counterfeiting operation in the Cixi province of China and confiscated 30,000 semi-finished spark plugs. These, after being finished, would find their way into the Indian aftermarket and would be sold as Mico's spark plugs. The Chinese authorities also seized 35,000 spark-plug cartons in the Mico brand packaging.
Mico is among the numerous auto component companies in India whose products, especially its top-selling spark plugs, are being rampantly copied by counterfeiters in the country and abroad. It is perhaps the only auto component manufacturer in India that has a dedicated cell and a dedicated officer to spearhead the company's anti-counterfeiting drive in the country.
Speaking to Autocar Professional, M Aravindakshan, who has been entrusted to run the cell, says that the raid in China was conducted in March this year and began with the discovery, sometime last year, that consignments of counterfeits were coming from China. Mico had found out that an unscrupulous Indian importer specially ordered these counterfeits. Mico had alerted the customs department, which then set its own action in motion. The company had also carried out tests on the materials of the Chinese counterfeits at that time.
Mico has been carrying out effective raids in India in several regions, for years, at wholesale and retail outlets and more so at the manufacturing source of its counterfeits. The company, therefore, decided to adopt this strategy and attack the various sources of counterfeiting even if it were in another country. Aravindakshan, while attending a Bosch global anti-counterfeiting conference in Shanghai, met up with some private Chinese investigation agencies and zeroed on one, China Top-Gun IPR Agency Co Ltd.
Taking the help of the local Bosch office there, Aravindakshan began his preparatory work with China Top-Gun whom he had selected because he found them to be more confident, committed and an agency which expected to be paid once concrete results were obtained. China Top-Gun eventually led and narrowed down its search to the Cixi operation of Cixi Jinguan Spark Plug Factory located in Henan village, Henghe town, Cixi City Zhejiang. It engaged two enforcement agencies namely Cixi Technology Supervision Bureau (TSB), as the main agency, and Cixi PSB as the second one. These together studied the suspect factory and other premises for two weeks.
#####
The raids were conducted on the morning of March 13. When the enforcement agencies entered the factory, they did not find any products. The teams, which were divided into two, then raided the premises of five private houses that were located in residential areas and, besides Mico counterfeits, found fake products and packaging of other reputed companies such as Denso, NGK, Bosch and Honda. The confiscated items were taken in three trucks to Cixi TSB’s storehouse. It is estimated that all counterfeits put together (finished products and packaging) amounted to 300,000 units.
Aravindakshan says that he found the Chinese authorities to be more proactive than their Indian counterparts. The next day after the raid, Cixi TSB made a detailed report on the case and submitted it to the Cixi municipal government, which is said to have given it serious attention. Though the alleged owner of the operation, Huang Bingrong, is yet to be caught, the authorities are pursuing the case further. On being asked about the impact of these raids, Aravindakshan says that counterfeiters in China always take the value of the consignment in advance and so if an Indian importer had ordered these counterfeits, the person would have lost both his money and the consignment.
Mico, which conducts 10-12 raids every month in the country, notched a total of 51 raids between January 2005 and April 2006, in various Indian States including Tamil Nadu, Uttar Pradesh, Punjab and Calcutta, resulting in 37 arrests. In an all-India study that the Automotive Component Manufacturers Association of India commissioned with the National Council of Applied Economic Research, released in the year 2000, a sample size of 12 aftermarket auto parts were chosen. It was found that among the three categories of these parts, namely, genuine (OE), counterfeit and local brands (non-OE), the second category accounted for 37.6 percent of the total market share of the sample parts and was valued at Rs 1,459 crore.
Although no latest study is known to have been conducted so far in the country, it would be safe to say that the magnitude of counterfeiting of auto parts has been growing steadily despite the efforts of individual companies and law enforcement agencies in the country to combat it.