On Thursday, a team from Mahindra & Mahindra carried out a raid of counterfeit auto parts in Delhi’s Kashmiri Gate. “There was a rich haul of fake spares,” Hemant Sikka, Chief Purchase Officer, Automotive and Farm Equipment Sectors, told BusinessLine .
Barely some months earlier, M&M had conducted similar raids in Chennai and Guntur where once again thousands of parts were seized. These operations were carried out jointly with the police and specialist agencies appointed by the company for this purpose.
Sikka, who took additional charges as Head of Spares at M&M last April, is determined to continue fighting this menace. There is yet another raid coming up very soon but no details are forthcoming.
“We are very concerned about the problem since it directly affects our customers. I have travelled through virtually every nook and corner of India and am amazed to see this happening,” Sikka says. These fly-by-night operators work out of small rooms or garages with minimal labour and sell their fakes in the retail market.
For automakers, the biggest concern is safety because a counterfeit part can wreak havoc in a vehicle, right from braking failure to triggering a fire. In addition, it eats into the business of the original component suppliers and causes huge losses to the Centre. This is because these fake parts do not come out of a factory, where duties are consequently levied, but from some dingy room directly to the bazaar trade.
Sikka compares the threat arising from fake parts to spurious drugs where the wrong medicine can kill a patient. Likewise, the occupant of a car can die if safety is compromised. “The process of counterfeiting is like cancer because just when you think you have tackled the threat, yet another other crops up elsewhere,” he says.
M&M has two parts warehouses in Pune (for auto spares) and Bhiwandi near Mumbai (for tractors) which send out supplies directly to dealerships and the open market. To that extent, the company is reasonably insulated from the threat of counterfeiting.
Hyundai Motor is also believed to be cracking down on spurious parts makers and it is getting increasingly clear that more players need to participate actively if the menace should be kept in check.
Industry observers say it is time associations like ACMA (Automotive Component Manufacturers’ Association of India) and SIAM (Society of Indian Automobile Manufacturers) also join hands to take this issue head on. After all, it concerns the profitability of vehicle and component makers by the end of the day.
Spurious parts reportedly take up a third of the total supplies in the market which only puts in context the magnitude of the problem. For those who constantly associate this problem with the Chinese, it is disconcerting to know that the threat is a lot closer back home. The M&M initiative is a start but still only the tip of the iceberg, observers say.