Product and brand piracy causes billions of euros worth of damage in the mechanical engineering industry, and the damage has become even greater in the last two years. According to the current study “Product Piracy 2020”, the annual damage has now grown to 7.6 billion euros – in 2018 it was 7.3 billion euros. A turnover of this amount would mean the equivalent of almost 35,000 jobs in the mechanical engineering industry. “What is alarming is that 57 percent of the companies report counterfeits that pose a danger to machines and plant equipment. This demonstrates that plagiarism is not a trivial offence, because operating fake machines or plants with fake components can pose a real danger to the operator,” says Steffen Zimmermann, Head of the VDMA Competence Center Industrial Security.

Every two years the VDMA holds a survey among its member companies on the threats and effects of counterfeiting. In the current study, which was carried out by the Fraunhofer Institute for Applied and Integrated Security AISEC on behalf of the VDMA, 74 percent of the companies questioned stated that they were affected by product piracy, and in the case of companies with more than 500 employees, this proportion even reached 90 percent – both are new record figures. “A trend reversal can also be seen in the perceived threat from counterfeiters. While this figure had recently dropped to 39 percent, 52 percent of those surveyed now spoke of an increase in the perceived threat level,” explains Zimmermann. The trade in counterfeit machines and components is flourishing particularly strongly in China. The People’s Republic is named as the most important sales country for counterfeit products (61 percent), followed by Germany with 19 percent. In third place for the first time is Russia with 12 percent.

Most of the companies surveyed point the finger at competitors (72 per cent) as the source of counterfeits, but business partners such as customers, suppliers or joint venture partners are also seen as the starting point for counterfeiting (41 percent). The most common types of counterfeits are individual parts (64 percent), followed by design plagiarism (60 percent). Even entire faked machines are entering the markets (40 percent).

The companies have little hope of being reimbursed for the damage caused by taking legal action in court. Only 26 percent of the companies surveyed initiate civil court proceedings at all – in 2018 it was still 39 percent. Around half of those surveyed completely refrain from taking action. “Small and medium-sized companies in particular seem to increasingly resign or shy away from the effort of taking legal action,” says VDMA expert Zimmermann.

The complete study “Product Piracy 2020” can be found here.