Farm equipment manufacturer New Holland Fiat (India) is planning to sell components with security features similar to those found in currency notes. The move is intended to deter sales of counterfeit spare parts.

To begin with, the company intends to ship every single product with a hologram that can be identified under ultra violet (UV) light. Further, it will put as many as eight different identification marks on each one of its nearly 8,000 components sold through dealer networks.

“These features will be introduced this month, starting with 3,000 fast moving parts such as filters. The UV lights to authenticate the parts are not expensive, they come at ₹50,” New Holland Fiat Managing Director Rakesh Malhotra told Business Line in an interview.

“We will provide the UV pens to our dealers, while we will also educate our dealers, stockists, mechanics and even customers about these features,” Malhotra said.

Grey market

While this will go a long way in helping customers buy genuine products, the company will incur an “incremental” additional cost, which will not be passed on, he added.

For the industry, fake spares is a serious issue as it tarnishes the manufacturer’s goodwill, affects the economy , results in jobs losses and compromises the safety of the vehicle.

The mostduplicated products include clutch parts, filters (air, oil and fuel), belts, liners and brake pads, gaskets and gear parts among others.

The auto component industry loses 29.6 per cent of its sales to the grey market, according to a FICCI–Cascade study, ‘Invisible Enemy’, in 2012. This amounts to about ₹9,198 crore of the total estimated industry size of ₹31,046 crore.

New Holland Fiat (India), which in 2013 got about 4-5 per cent of its total turnover from the sale of spare parts, has also been battling the grey market issue for some time.

In 2012, it sold 32,000 tractors, 92 balers and 25 sugarcane harvesters in India.

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