It is a cancerous growth which automakers are struggling to keep in check. Counterfeiting has been around for years and is becoming even more difficult to tackle with every passing day.

As Senior Vice-President and Head of the Spares Business Unit at Mahindra & Mahindra, Bharatendu Kapoor is also aware of the challenges ahead. When he displays a packet containing an auto spare part, it is impossible to make out that this is a copy. And to think that counterfeits account for a third of the ₹45,000-crore aftermarket for auto components.

“This is not a Mahindra genuine part and the packing is not done by us. A customer can never get to know the difference,” says Kapoor, holding up the fake packet. In the aftermarket, the retailer promptly says it is 50 per cent off and the buyer believes Mahindra is selling it at a discount.

The packet on display has an oil filter priced at ₹194 which is sold at ₹100 giving retailers a huge margin.

Tough measures

Kapoor knew it was imperative for M&M to check this menace quickly before it got out of control. One option was to go in for customer education in the market but this was clearly impossible for an endless number of spare parts.

Printing a separate label was of little help either since these were also replicated in the market. M&M then opted for a hologram when assured that this could not be copied except that even this was a piece of cake for counterfeiters.

Kapoor also realised that only the price varied in a fake packet with the same label printed for all parts. The part’s number is the same for all fake packets and the customer does not know the difference. For instance, it could be the number of a filter but what is being sold is a bearing. M&M then began educating the customer on the specific part being used in the packet.

Going a step further, a very small Mahindra logo was added below the printed line which is almost impossible to see with the naked eye. Only ultraviolet light will do the trick and the company started reaching out to its genuine parts retailers to display this to customers.

The key was to find an easy, affordable option for the customer and, last year, M&M kicked off the process of an UID (unique identification number) for each box. A customer can send an SMS to this number and gets a message back to confirm if the part is genuine.

By the end of the day, it was clear that something more had to be done since all these were piecemeal efforts. “We also knew that mechanics were selling the packing at prices as high as ₹200,” says Kapoor.

Someone then puts in a non-genuine part and the racket continues.

The company is now buying these packets back from mechanics and awarding them points as an incentive. Kapoor is pleased with the response and terms it a “big success”.

Genuine effort

Over the last year, over 15,000 mechanics have been registered as part of this exercise. Apart from points which can be encashed, they also get ₹2-lakh insurance for life. “Though it is costing us a bit, it is worth it as the mechanic is motivated to use the genuine part,” says Kapoor.

In the process, M&M is now able to track the buying patterns of spares as well as the kind of customers queuing up for them. “The intangible benefit is that I get to know the right mechanic who is a specialist in suspension, engines and so on,” says Kapoor.

As a result, the company has now launched a mechanic education programme which was not even remotely on the radar when it began this initiative. At that point in time, the idea was to curb the fake parts menace and this has been the unexpected spin-off.

“These people are mechanically very good but there are a lot of electronics getting into the vehicle and nobody is there to train them,” says Kapoor. They can now travel to M&M’s training centre when they have accumulated 500 points and get valuable lessons on the vehicle’s anatomy. Going forward, the idea is to help them further by way of workshop equipment upgrades.

The total number of mechanics in the M&M map is nearly eight lakh and 15,000 could seem like a drop in the ocean. Yet, the target is to touch 50,000 by the end of this fiscal. “The initial 500 was hard, doubling it to 1,000 was relatively easier and thereafter a cakewalk going from 5,000 to 15,000. The snowballing effect is now in place,” says Kapoor.

All this augurs well for the company which today has 21 per cent of the aftermarket though this component would have been bigger without counterfeiting to contend with. “Last year, we did ₹2,500 crore in spare parts where it could have been twice as much. Our parts business should be hitting ₹10,000 crore by 2024,” says Kapoor.

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