Quality Battles Piracy in Aftermarket WarMon, 09/01/2014 - 10:42
High quality automotive spare parts suppliers have become attractive targets for counterfeiters and brand pirates. Within the tight, competitive environment of the entire sector, aftermarket suppliers battle for market share and at the same time prepare for more aggressive measures in protecting their intellectual property. Brake Parts Inc. (BPI), a supplier focusing on friction components including brake pads, is ready to tackle this rising wave of piracy. Vicente López Guisa, Director General of Brake Parts Inc. Mexico, explains that after being bought by Affinia in 2012, the company is now focusing on the domestic market. “We can produce whatever parts are needed and export them around the world, however, 75% of our production is for the local market and 25% is for export.” As it zeroes in on the domestic market, Brake Parts Inc. has inevitably entered the fray against piracy.
As BPI’s business strategy centers on Mexico, it detects the peculiarities that make this market a unique business environment. According to López, one of the biggest cultural characteristics that sow the seeds of piracy is the lack of prevention. “Brakes are a key element in a car that should be seen as a form of prevention, and it is cheaper to replace brake pads with our parts than fill a gas tank in a compact car,” says López, who is baffled as to why people are putting their lives at risk by buying a cheaper alternative for such a price. “When you see taxi drivers changing the brake pads on one side of the car and not the other so they can use them up to the nub, and ignoring OEM safety guidelines, it becomes a cultural matter,” López remarks. “Other automotive markets strictly enforce regulations when it comes to quality, but anyone can claim compliance with regulations and write any guarantees on their products in Mexico. Our brands comply with international safety tests, but there are cheaper brands out there that choose to ignore such compliance. Those cheaper brands fallaciously claim to be using the same technology as we do,” he explains. For López, the counterfeiters are becoming more devious in their practices. “We have found some products that were just put in a box with a fake brand name and with no information as to the place of origin or the importer.” Pirate products claim to be made in the US or Canada when they are actually made in Asia, but their outrageously low prices have allowed them to capture a fair chunk of the market. Faced with this prospect, some might say that if the market favors such brands, then suppliers should head in that direction. However, López disagrees wholeheartedly, saying that “to do so, we would have to sacrifice the safety of drivers and passengers. BPI stands by its quality, which shows in the fact that our American Brake Lock brand is the market leader in the aftermarket. 90% of installers know the brand and prefer it.”
Countering this cultural habit is not an easy task and the company has increased its number of people in the field to educate installers and repairmen. “We are also working with governmental entities to increase education about why changing brake pads is part of ordinary road safety,” comments López. While various sectors of the automotive industry suffer under the ongoing wave of imported vehicles, BPI sees it as a source of opportunity. “Some of our customers, especially in the north of the country, are specialized in these types of vehicles,” he adds. However, López stresses that while these vehicles may be part of the company’s customer base, this is not its main growth strategy. “Mexico should no longer be allowed to import older cars that can be bought here for US$1,000 and do not follow the safety standards we uphold,” states López. After careful studies, BPI discovered that the consumer market is not littered with users purchasing only pirated products, as thanks to their growing purchasing power, many consumers are now looking for high quality products at competitive prices. “The conventional wisdom in Mexico says that only installers go to shops to buy replacement parts, but our own research found that a lot of Mexican vehicle owners buy replacement parts directly and then have them installed.” López attributes this change to a lack of trust in garages, since going to the dealers directly cost more money but provides customers with a warranty and a sense of security. “Consumers are smart and this lack of trust is leading them to buy their own parts and ensure that the repair is done as they want it to be,” he adds.
As BPI continues to protect its intellectual property and educate the consumer market, López stresses that it has other priorities as well to follow the evolution of technology and performance standards and apply them to its products. “Usually, brake pads are semi-metallic or ceramic, although carbon ceramic is used for high-performance vehicles. In 2014, we will launch a new formulation, LM3, which is based on proprietary technology,” announces López. This new technology will last longer, run more silently, collect dust, and make braking distances shorter. As the company embraces innovations in other automotive markets, these will surely arrive to Mexican shores in time, helping it successfully compete against its pirate adversaries. For now, the company is dedicated to serving the aftermarket, but López does not rule out the possibility of entering other segments. While it is evaluating these opportunities, BPI is continuing its expansion into other markets, like Europe. For López, the two manufacturing sites in Mexico shall serve as pillars upon which this ambitious expansion phase can rest.