China helps Honeywell chase phony parts
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BEIJING -- Honeywell Transportation Systems, which has been victimized by makers of counterfeit turbochargers, says it has gained the Chinese government's help in a crackdown on bogus aftermarket parts.
The supplier recently won a court case in China against Shanghai Gerritt Turbo Systems Ltd. for infringing on Honeywell's line of Garrett turbochargers.
Honeywell also won a court case against Shanghai Zhoudian Trading Co., which had been caught trying to export counterfeit Bendix brake discs.
While no one is ready to declare victory over China's numerous counterfeiters, David Paja, general manager of Honeywell operations in China and India, says Chinese officials are boosting penalties on counterfeiters and are pursuing their collaborators.
"What has changed in the last few months is that the government is taking very proactive steps to chase counterfeiters," Paja said. "This is a big change, and we are very pleased."
In the Shanghai Zhoudian case, for example, the government successfully shut down an exporter who trafficked in counterfeit goods, Paja said.
Another court case against a maker of counterfeit turbochargers resulted in a one-year jail sentence for a company executive.
"These people used to operate openly, and now they have to go underground because they could get jail time," Paja said.
Nevertheless, counterfeit auto parts are still a big business -- and a global headache.
According to a study by Frost and Sullivan, global sales of counterfeit parts exceeds $45 billion a year.
The Japan Auto Parts Industries Association has estimated that 83 percent of those components are produced in China.
Paja declined to estimate the cost of counterfeit parts for Honeywell.
But global supplier TRW Automotive Holdings Corp. has said that it has lost as much as 20 percent of the Chinese market to counterfeit brake pads and rotors, an estimate that Paja found plausible.
"You will never be 100 percent successful," Paja said, "but the authorities have been much, much stronger about sending a message."
You can reach David Sedgwick at dsedgwick@crain.com.
