Germany’s machine builders are often victims of product pirates. Three out of four companies in Germany are affected by counterfeiting, according to a study presented on the sidelines of the Hannover Messe industrial show by the industry association VDMA and the Fraunhofer Institute for Applied and Integrated Security (AISEC).
The industry estimates the resulting damage at around 6.4 billion euros. Almost 29,000 jobs will be lost as a result. In addition, there are indirect consequences through loss of image, unjustified recourse claims or the loss of market advantages.
Small companies are mostly affected. According to the study, companies with up to 250 employees lose almost twice as much sales through imitations of machines, components, spare parts and designs as large companies with more than 1000 employees.
“However, the small and medium-sized companies also defend themselves much less frequently,” reports Steffen Zimmermann, head of the VDMA Competence Center Industrial Security. And in fact, according to the study, a good one in four of the larger companies has already filed criminal charges against counterfeiters. For smaller companies with between 250 and 1000 employees, the rate is almost zero and for companies with fewer than 250 employees it is just six percent.
“Small companies often lack the time, money and staff to take efficient action against counterfeiters,” explains Zimmermann. After all, many would try to find an out-of-court solution, for example through a letter from a lawyer, personal discussions or clarification measures with the customer. “That can help, because many plagiarists act undetected and do not want to be named publicly.”
Behind the counterfeiting are mostly competitors, either as manufacturers or as clients for professional large-scale counterfeiters, the number of which has grown continuously in recent years, as the study shows.
And organized crime is also heavily involved. In any case, Zimmermann reports cases of counterfeit compressors that were sold in hardware stores – by the Italian N’drangheta, as it turned out. “They want to make money and this is where high profit margins come in easily.”
But customers, suppliers and business partners are also sometimes unscrupulous, reports the VDMA. “We recently had the case of a German company that was supposed to deliver spare parts to a customer in China. But these parts were too expensive for the Chinese. So he threatened to give the construction plans to a plagiarist if the parts weren’t sold at a 40 percent discount,” says Zimmermann.
And especially in China, suppliers of imitations are easy to find. The People’s Republic is by far the most important country of origin for counterfeits in the mechanical and plant engineering sector.
In the study, 87 percent of those surveyed name China as a source of plagiarism, which is even more than in previous studies. India follows in second place for the first time, mentioned by at least 26 percent of those affected.
And then comes Germany. In this shadow economy, the Federal Republic is not only a victim, but also a perpetrator. Almost every fifth company has dealt with counterfeits from their own country. According to the VDMA, this is also due to the technological strength of local companies. “Where there is a lot of know-how, clusters form,” says the association.
But it is not uncommon for the topic to depend on individual people. “Sometimes data is simply taken along on a USB stick if someone changes companies,” reports Fraunhofer expert Ferdinand Jarisch. “Manufacturers and plagiarists often know each other in this country, they even switch roles from time to time.” China, India and Germany are followed by Italy, Russia and Turkey in the list of countries of origin of counterfeits.
Almost everything is copied. This starts with complete machines and systems, but also applies to spare parts and components, the design and even operating instructions and technical documentation or catalogues, product photos and packaging. In addition, websites and online shops are now also being copied, reports study author Jarisch.
And depending on the affected part, this can be dangerous. “The threat posed by plagiarism is enormous,” says VDMA representative Zimmermann. “Copyware is a demonstrable security risk.” Four out of six companies reported counterfeits that posed a risk to operators or users.
In addition, there can be serious consequences for the environment if, for example, inferior counterfeits are installed in chemical plants. And they can sometimes unintentionally end up with the users, for example with orders via online platforms and marketplaces.
“In its own warehouse, Amazon puts things that come from different sellers but ultimately have an identical item number in a large box. So original parts and plagiarisms can be mixed up. And at the end of the day, it’s the lottery that matters to the customer,” says industry representative Zimmermann. A number of machine builders have therefore said goodbye to Amazon as a sales channel.
According to Zimmermann, the sale of counterfeits is even more common at the Chinese Internet retailer Alibaba. But German companies are also active there – and want to remain so in online-savvy China.
And apparently they can do something. “Schaeffler signed a contract with Alibaba, since then the number of counterfeit Schaeffler products on the platform has fallen by 99 percent,” reports Zimmermann.
Otherwise it is difficult in China in the fight against plagiarism. Complaints are possible these days. But the penalties are anything but deterrent.
“Usually a small thing is changed in the product and then the business continues. Or the counterfeiter simply takes on the models of the plaintiff’s competitors. But it still remains in the market.” Counterfeiting must not be worthwhile, otherwise nothing will change in China.
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