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Mike Kojima posted on September 01, 2009 18:05 

Revenge of the Nerd-Boycott Fakes!
By Mike Kojima
I wrote a very similar column to this during my stint as Engineering Editor at the late great Turbo Magazine about a year ago. Even though a year has past, the main issue that is ruining our industry is still going full blast. That issue is the copying of components designed and produced by quality companies by other companies, usually of Chinese origin and dumped on our market at ultra low prices.
A lot of people in our industry bemoan the fact that the passion and innovation of the game is getting diluted by the influx of fly by night Asian companies that are in the business of making cheap knockoffs of parts made by the established performance companies. These companies sell their fake wears for a fraction of the original’s price using no cost marketing ploys on Ebay and other inexpensive direct selling arenas.
This practice pisses me off to no end; it’s ruining our industry and our hobby (or passion depending on how important cars are to you). The rips off artists incur no R&D costs and have much lower tooling costs (its way easier and cheaper to copy and reverse engineer things). They even benefit from the marketing costs an original manufacture puts into their products by making them look exactly the same or claiming it to be the same with counterfeit labeling and packaging.
Lately I have heard many times after seeing something cool and innovative at the track that a company will have no plans to sell said object “because it will just get ripped off and sold on Ebay before we can even recover the development costs”. If you feel that products from established companies are becoming stale and boring, or there is no rush to develop parts for your car, blame the copy cats. The number of smaller, more innovative and nimble companies that drive innovation in a fairly small and dynamic market like ours are dropping like flies because of the rip off artists.
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| Hotshot used to be a company that made headers for models that were not quite mainstream like the Nissan Sentra, Saturns, Neons, the Ford Focus and various Toyotas. Copycat rip off artists stole all of Hotshots designs and they went out of business. You can bet that the Chinese companies that stole Hotshots designs won't come out with new headers for these less than common models. The mainstream manufactures won't make headers for your less than common car either. Need a header for your MR20 powered B16 Sentra? Well Hotshot is gone and the Chinese companies can't R&D one for you either |
Sometimes the quality of these knock offs is ok (but never as good as the original) but most of the time is quite shoddy. Many times the quality is so bad; it can actually harm your car or put your safety at risk. A good example of this is an SR20 oil pan I saw the other day. It looked just like a Greddy oil pan at first glance. I’ll call it a Freddy. The Freddy was installed on a drift car that was being worked on for a spun rod bearing at a friend of mines race prep shop.
The Freddy made me do a double take because the poor quality of the casting caught my eye, 5 feet away. I thought, WTF, Greddy doesn’t make something bad like that. On a more careful inspection the Freddy was sand cast using some kind of poor quality sand that was stuck in the metal. Rubbing the surface of the casting would cause it to shed partially embedded sand! The sand had gotten loose inside the engine and had wiped out the bearings, scored the crank and scratched up the cylinder walls. That was one expensive cheap oil pan.
Another thing I have seen lately was a rip off of a Ground Control coil over conversion kit. The kits as they sat on the shelf of a performance retail outlet looked like a Ground Control kit from a couple of feet away but the anodizing was a cheap color flash, not the corrosion resistant hard anodizing Ground Control uses. The machining was not as clean and who knows what alloy was used. The thing that made me really angry was the springs. Ground Control uses top notch Eibach ERS springs and the faker’s used uh, red springs. Who knows what spring rate these were? The wire diameter and coil count seemed identical for all 4 springs for many different applications. Not to many cars I know handle well with the same spring rate all around. This affects user safety and is morally apprehensible. Universal spring rates for all applications?! WTF!
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| Volk uses FEA to pare down the weight of there forged high quality wheels without taking risks or sacrificing strength. I bet the Bolk copy of this wheel made of melted down beer cans doesn't! |
I have seen fake Volk wheels with the JLL approval standard mark faked into the wheel. Let’s call this wheel a Bolk. I know the Volk wheel was designed from the start to be a wheel forged from a high grade of aluminum. The Bolk was crudely sand cast from recycled beer cans most likely. Now I know Volks are designed using FEA stress analysis to pair the weight to a minimum, making the most of the superior mechanical properties that forging and quality wrought aluminum alloy posses. Now will the sand cast pot metal Bolks made using a design that depends of the strength of forging and quality alloy pass any sort of safety standardized testing? Probably not. Would you want to drive a set of Bolks on the track? How about having Bolks on a car driven by a family member?
At SEMA I was shocked to find a booth hawking what appeared to be fake Motons dampers. When I asked the reps what the knobs on the cannisters did, I was shocked that they told me that the knobs were for hard and harder damping? They did not know what the knob on the top of the shaft did. If you are going to copy something, at least understand what you are copying.
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| Real or Fake Tial wastegate? The real Tial has a reinforced nomex silicone diaphragm, the fake one is molded rubber of unknown quality. The real wastegate has an inconel base and a stainless valve. Who knows what the fake is made of. Guess which one is likely to stick and blow your engine? |
My neighbor bought a fake Tial wastegate off of ebay for his turbo Integra. He was proud of his purchase and he argued with me at length like this faker company was Robin Hood or something. Never mind that the Fake Tial had a unreinforced stamped rubber diaphragm and a body and valve made of mystery metal. I am not sure which came first, the torn diaphragm or the stuck valve but the wastegate failed and so did his engine when it hit 30 plus PSI on pump gas. I have also seen copies of Greddy and HKS blow off valves using shoddy manufacturing and inferior materials as well.
The latest pisser was a fake turbo I saw on the net. It was a knockoff of the Garrett GT28RS. It was called the Disco French Fry! The real Garrett GT28RS turbo has an insider’s nickname, the Disco Potato. This was because it was developed for a Nissan Sentra Concept car that was nicknamed the “Disco Potato” by the motoring press because of its tuberous shape and iridescent paint job. So when the new turbo hit the market, the cars nickname stuck to the turbo and it became known as the Disco Potato turbo to denizens of chat rooms. The copy cats even ripped off the turbo’s sort of lame nickname. They should have called it a Carrot or something!
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| These are real Moton Motorsports Dampers. They cost $7500 bucks and kick ass. You can bet that Lex from Moton knows what the various knobs do and can help you dial them in. The fake Montons I saw in the booth at SEMA looked exactly like this. The company reps didn't have a clue to what the knobs did. They were probably fake |
What can be done about this? Don’t buy that shit! It’s not cool; it’s as lame as fake Rolex. You might be proud of your ride but the guys in the know will clown it. Most of the time inferior parts will hurt your performance, your cars durability and maybe even your life. Its false economy. Save your money, buy real parts from real manufactures.
Now note that I have nothing wrong with inexpensive parts made in Asia. I am not that kind of brand snob. If a Chinese company comes out that flosses there own designs or there own unique variations of existing designs and sells them at a low price point, I have absolutely no problem with that. I am old enough to remember when Japanese products were laughed at too. That is capitalism at its best and a little competition is good for an industry. The issue to which I am nearly violently opposed to is the blatant rip off and copying of existing product, especially with copies of inferior quality that could be dangerous.
Join the staff at MotoIQ in this fight. MotoIQ will not use fake parts in our test cars nor accept advertising dollars from companies that produce fakes. This stance might hurt us in the short run but we will fight for the health of our industry which is rapidly disappearing. MotoIQ supports the real inventors and innovators in the Racing and High Performance Market. Fight the Power, support our industry.
Tuesday, September 01, 2009 7:42 PM
Its a tough fight, most kids, most consumers just see the $ . Thats it. To them the parts all alike. One costs $300, the other costs $100. They buy the $100 part. Eventually that $100 part fails, and depending on who and how it is, might put them off the industry or tuning cars altogether. Dollar and bottom line. Walmart has 4400 stores.
Wednesday, September 02, 2009 3:50 AM
More like the one part isn't there, once they run out of stuff to copy, who is going to do the R&D when there's nothing newleft to copy? Air filters are another one that pisses me off, seeing these K&N knock-offs that won't do squat to keep dirt out of your motor, sold with intakes that are clear rip-offs of AEM, PR, and others. You're so right when that part fails, way too many of these are the kind that will stop the motor dead. I'd think that would be enough to turn people off, but I guess when a used SR20 can still be had for under $500, they just don't care or are too ignorant of what they're supporting to know. Same result either way...

Wednesday, September 02, 2009 3:58 AM
Its stuff like this thats burning me out of the game actually. Well the number one reason I'm getting a real degree. I'm young, I have to think about where I want to be in 20 years and I'm not sure how this industry will fair. Some of us have the pricing lattitude to go toe to toe with the knockoffs BUT, we would destroy every other shop that can't in the process. More or less running the industry into the ground faster. This is something that I think needs lobbying. Don't forget those knock off Takata's with the FAKE FIA TAG!!!!! My importer friend who primarily sells on Ebay has a game plan together for this. Post one: " If they are on eBay, there is a the VeOR program. How eBay Protects Intellectual Property (VeRO) All it takes is for the real importer/distributor to sign up on this program with eBay, and when ever they see their trade name being used to sell this crap, to contact eBay. eBay will kill all the listings from that seller. And if that seller continues trying to sell their junk, eBay will suspend them. But it take effort on the part of the people who are selling the real deal. HKS does it. APEX does it." Post two: "The other option is to attack these rip-off artists aggressively. Continue to point out what products/sellers are fake. Push for others to flood their e-mails with negative e-mails. (this is very effective on eBay sellers) Post new threads on every forum your signed up on about who is doing this. And be more negative to anybody buying this junk. And this should carry over to all the non-brand name turd products out of china. " Some background on the fellow that posted this. Before he retired he was a machinist at the San Antonio Takata plant. He tends to take this kind of junk personal.

Wednesday, September 02, 2009 7:23 AM
I don't have a problem with the copycats, but I am very careful where my money goes. I am trying to think of a copycat anything on my car, and can't. I did buy a cheap POS fused distribution block from ebay which was certainly from China. I couldn't find anything locally, and it works well enough. Most of the people who buy copycat products wouldn't pay the price for the original and thus were not a potential customer in the first place. Many of them don't even understand the ramifications of their actions. An person I know brought by a "JDM Sport" turbo kit just last night. I told him what I would tell anyone, sell it and go get a good kit. The treadstone kit had turbonetics components and is under 1800. That was such a cheap price I couldn't believe he paid $750 for the "JDM" kit. He thought JDM Sport was a serious brand name. If all the people in the know stop buying china crap (which most don't anyway) it won't affect a damned thing. It is time for the future generations of companies to do something about it or die. I don't know what it is, but it isn't my job to figure it out. Most people don't know this, but you can fabricate your own parts. Want a header? I priced a 4-2 header with a local race shop who specializes in high end construction (1000whp+ outlaw cars mostly) and the price was LESS than price of the brand name bolt ons. A customized, made to spec part should not be so cheap compared to the mass produced headers. Reality check on the 7500 dampeners btw. Only a race team or spoiled brat gets 7500 dampeners.
Wednesday, September 02, 2009 8:09 AM
down with megan, rotora and all the fakes!!!! great article Mike!
Wednesday, September 02, 2009 10:00 AM
I have mixed feelings about Megan. They are pretty close copies of existing parts made by other companies but not exactly because they usually don't fit or work as well! What I do like about Megan is that they support the community by sponsoring many local events and pro am racers. I think this is good for the health of the sport and shows that they give back to the community. Megan does have a technical staff of one guy in the USA who helps refine the product so I think they are in a grey area.
Wednesday, September 02, 2009 10:10 AM
Megan is here, they don't do much R and D, but they do support. Same with Rotora. They do support the event and industry. I think we are talking more about the SS Autochromes, and XS Powers that exist only on eBay. Its honestly not a very clear issue, as I can point out lots of things that are "copies" of other things. Not all things from China, or Taiwan, or Thailand are bad. However there are companies there that do the 2nd or 3rd shift on parts they make for other companies, and then "back door" the sales.

Wednesday, September 02, 2009 10:12 AM
Chinese "crap" is not the same as copied "crap". I have no problem with Chinese parts of inferior quality or good quality on the market. Stuff made in Taiwan can be of excellent quality equaling or even bettering the Japanese. In fact many Japanese companies get there stuff made there. Some of the finest bicycles in the world are made in Taiwan. As far as bad stuff, let the buyer beware. My problem is with the blatant theft of intellectual property. Especially counterfeits and copies made with inferior materials that could endanger people. Thats what hurts our industry, your wallet and maybe even people as well. The country that has no problem allowing adulterated baby food and toxic kids toys on the market must be stopped in this regard. As far as Ebays programs, Ebay will only go so far. If you get an auction stopped, the next day the fakers open 10 more with different new accounts. Its like whack a mole. I have seen several friends businesses go down and out despite efforts to quell the flood on ebay. If you bitch about not being able to get a header for your B16 Sentra, New Focus or not being able to get a GA16 header anymore, blame the copycats like Stone Mountain, OBX and others that put Hotshot out of business. Most of the problem is us.

Wednesday, September 02, 2009 10:12 AM
Some other things I've noticed with the fake crap when looking at some SS Autochrome (or whatever) SR20 turbo manifold (for the stock T25). This was at a buddy's shop that his customer had bought for him to install. Usually, he wouldn't install this kind of thing, but he was waiting on the manifold to finish the car and wanted it out of his shop. Space = money. 1. It had the MIG welds ground down, polished, then they TIG'd the flange-runner intersection with no filler to give it that TIG welded look. 2. The runners were indeed made of stainless (of unknown grade), but the flange was mild steel. 3. Those previously mentioned MIG welds protruded into the runners by 1/4-1/2" in some spots. Flow FTL! 4. The inside of the collector was an absolute mess. 5. The matching downpipe had to be re-engineered since it hit the brake MC. My buddy installed it on his customer's car with much trepidation and warning of failure. Sure enough, 2 months later the guy was back with a nasty exhaust leak. My friend told him he wouldn't weld it to fix the crack since it would just crack again, saying he would only touch the car to replace the manifold. The guy took it to a muffler shop instead, and 2 years later, that manifold looks like a metal brain made of booger welds and slag.
Wednesday, September 02, 2009 4:24 PM
Why doesn't the government just put massive tariffs on everything from China (like Japan does for all things not made in Japan) and then we would be straight. The innocent would be protected by not getting jacked from shitty manufacturers because the made in China shit wouldn't look so appealing, the cheap asses who buy Chinese shit couldn't, and the real engineering houses wouldn't need to worry about getting jacked either. Eventually all the crooked ass companies who knock shit off would go out of business. Everybody wins.
Wednesday, September 02, 2009 6:29 PM
And massive tax cuts due to the extra revenue!
Wednesday, September 02, 2009 6:31 PM
Megan did in fact develop a header for the B16 Spec-V, I have it on my '08 Spec-V. It has been dynoed by a SpecVForum.com member to add an honest ten HP. So Megan didn't steal this design, as no one else makes one!! Thanks-Doug
Wednesday, September 02, 2009 8:27 PM
Good write-up, Mike. Oddly enough and even though I'm part of a very cheap car group(sr20's), I've never cheaped out and bought the "other" brand. I've argued on the forums about this practice until my finger nails have bled... I normally get shouted down. Of course it means it takes me forever to upgrade my car... but then, my kids have first priority on the money funds anyway. I've gone the suspension/handling route, first. The power will just have to wait. Mark

Wednesday, September 02, 2009 10:41 PM
I came upon this interesting article about LV suing this girl because she used a slightly altered version of their bag to raised money for the "awareness" of the genocide in Darfur. LV has slapped a huge law suit on her because they are protecting their Intellectual Property. Most of the people that have commented in that article have no idea how hard it is to create something good. They just see big guy picks on little guy, but it has nothing to do with that. If they only knew hard it is to come up with something good. I could make 100 things and just 1 is a hit. But it took the other 99 to get to that 1 so you better believe I want to protect it. Edison reportedly tried to make a light bulb over 1000 times before he got one working right. http://torrentfreak.com/louis-vuitton-sues-darfur-fundraiser-for-copyright-infringement-080425/ I know the industry doesn't have as much power as those bag companies but maybe they can learn a thing or two from them. In the fashion world, knock offs are just an everyday reality, so how do they go about protecting their bags because those companies seem to be doing alright? Or the industry has to start doing some lobbying, find cheaper ways to sue in court, or at the very least, make a few probing phone calls to their representatives. Ever called the president or any of your reps? Someone really picks up. Try it.

Thursday, September 03, 2009 12:07 AM
Keep on adding quality parts Mark! I'm a first owner and it took me over 15 years of slowly adding to get my car to where I'm pretty much done. There are still a few little things here and here but they're smaller items. PimpSmurf You're right, I wouldn't pay 7,500 for dampers. There are way cheaper alternatives, without having to turn Chinese, that still come from good reputable companies, just like there are alternatives to Motec. One of the main things is education so I hope more people turn on to this site. I would never buy Chinese products if I could help it because they suck and they're scary. I'm working in Taiwan so we get way more of a steady stream of news regarding all the horrendous and fake things China does. Look what happened with that baby milk incident. They really don't care who they hurt. But being Asian, there are definitely some of us who are real tightwads. Just because no one has ever told you you were a tightwad doesn't mean that everyone doesn't know. I kidded one of my friends about her purse, "Where did you buy this fake Prada purse?" She said, "How did you know it was fake?" I didn't know. She has enough money to buy a real one but she chose to buy fake. Why? And if I had a dollar for every time I saw a Mercedes with an AMG badge which wasn't, here in Taiwan, Geesh! If you didn't know any better, you'd think they only sold AMGs in Taiwan. I haven't had the opportunity to clown 99% of these AMG drivers though. Great article. There should be more like it out there.
Thursday, September 03, 2009 9:54 AM
The purse industry has less problems because a purse is a status symbol. Girls see other girls' purses and either drool, or knock it because it's a fake, and they're good at spotting it/making fun of it. With cars, the kids are just about the power. If it makes the same power as the next one, they're fine with it. If it breaks in 3 months, they'll either just keep running it, or buy another. We, as the article says, just need to keep making fun of the knock offs. Different world with cars.

Thursday, September 03, 2009 12:12 PM
Some Chinese companies make absolute garbage from substandard materials. The real threat is that quality is improving, and that companies outside of those areas can't compete price wise. The Chinese market is a tricky one. I'm still not sure how I feel about it. There will be companies that stand apart as they realize quality is an actual aspect of a business that provides for longevity. There are good companies in Asia. I've hocked parts/designs to companies for manufacture and I have a pretty good idea they were manufactured overseas. The good thing is I had final say in GO, NO GO for production after inspection. They jumped the gun on a downpipe that had fitment issues and made it right. The companies are set up to copy prototypes..... or just copy. The intercooler piping set that was sent over was digitized, either with an XYZ arm or a laser scanner. Everything was digitized in CAD spot on, we made a diameter change after noting the critical areas that couldn't change and still fit, and everything came back perfect. That's the more legit side of the business. That dimension change here probably would have cost $60-100 and hour for the CAD time. You can have almost ANYTHING you send over copied no questions asked. Original design or straight up rip off, minimum production run of 25-50 pieces at prices so low..... you have no idea. Say you have an original header made at $75 a pop x 50 pieces (or less depending on if you care about materials or quality), your out $3750, turn around and sell them for $275 and your looking at $10000 return gross, $8500 probably after shipping/cargo fees. Even if you just hock them off to wholesellers in volume as opposed to direct resale, you'd make out. You'd only need to sell 14 at that price to cover the initial costs. So, there are a lot of INDIVIDUALS playing this game trying to pocket quick money.Even if you only manage to sell enough to cover costs and pocket 10%, that's more than you'll make with a CD or most investments. Then the market gets flooded with parts selling for $100, because even at that point it's still a 33% markup and profit. Any one with $10,000 to invest, or even less, can create a company name and try to make a killing the Chinese parts market. Some people try to do it as honestly as possible, some people could care less. The problem is when you get people in it that care about money more than cars and performance. The market structure is destructive in a lot of ways, but how many Americans have a clue about economics/business/globalization.

Thursday, September 03, 2009 1:08 PM
I was not trying to literally compare cars to purses. Just to say that both industries suffer from knock offs and because of that, try to find better ways to protect their respective intellectual property. But I think cars (kick ass parts) are a status symbol for guys. If you replaced purse with cars and girls with guys in your sentence, then guys do the same things too. Kids are going to be kids and if they're fine with it, then no matter how much an adult tells them "this is bad for you," they're going to do what they want because they're know it all's. If they don't listen then let them learn the hard way. I don't think the article was as much about making fun of knock offs as it was about expressing immense anger, the potential destructive costs, market impact, quality, and safety concerns that Mike has towards these knock offs. The root of the problem is not the tightwad, it's the knock off whores. I see educating as a better method than making fun of the knock off parts people buy because those people will automatically have a defensive reaction and circle the wagons. Show them a better way to do things and I believe most people will make the right choice.
Thursday, September 03, 2009 1:18 PM
Another thing. Very diversify here. Diversity is key to survival in this changing industry. Examples? Oh, Exedy, Ogura Racing Clutch, Takata, Recaro, diversity is all around us, and those who diversify WILL survive. What Pimpsmurf said is true. I've considered doing the same and just financing the design and construction of parts for the catalog. The big dogs have so much overhead that the little guys, let alone the knockoff crowd are seriously hurting them. Competition is another killer and it takes a good leader to cope with that. Example: Erebuni. Made in America FRP body-kits, most of the time they're the only guys that support a car. With more players in the game and worsened economic conditions they've gone ahead and reduced their overhead significantly. Stay lean, elite, and diversified if you want to survive in this changing world. That's how my family has handled their businesses for generations.
Thursday, September 03, 2009 2:05 PM
Is there a list somewhere of the companies that make knock-offs? A list of all the brands and parts that we should stay away from? The problem for me is that sometimes I don't know if parts are truly engineered or improved on or just knocked-off. I didn't know that Megan Racing coilovers were knock-offs, or that they engineered a real exhaust (as the post above stated). Its easy with stuff like SS autochrome or XS power though.
Thursday, September 03, 2009 9:13 PM
Why not start one on MotoIQ? I would love to see a constantly updated list on MotoIQ of the companies to avoid because they make knock offs or that their quality is bad. Or what products to avoid from certain companies, even the reputable ones. It could be one of the columns or tabs. These are only friendly suggestions. How about assigning a reputation score of 0 - 10 for each company. And assigning a 0 - 10 score for each company's product in a specific category, i.e. blow off valve. Doing the parts would be too much but it would be cool. Sometimes, I can't tell what is what either. Especially brands I've never heard of.
Thursday, September 03, 2009 10:15 PM
Policing an entire industry is not reasonable for us to do. It could be a full time job for a watchdog organization. It is hard enough work just running this place. What I would be willing to do is to organize and report fakes that our readers discover. If you find bogus stuff, document it, take some good photos and write a careful description of what you found and we will make it public. If we get a good response, I will make a section of MotoIQ dedicated just to these findings. Send your findings to mike@motoiq.com
Friday, September 04, 2009 7:46 AM
What you said was totally reasonable and totally understandable. Keep up the great work.
Saturday, September 05, 2009 8:36 PM
One of the issues I've run into when attempting to purchase parts for my car is knowing which companies are legit and which are bogus. I obviously do not have the 20+ years of experience like Eric or Mike, and admittedly do not have the full blown passion to research into each company I run into. Would be it possible for a list to be started regarding respectable companies? Like Mike pointed out it would be a ton of work to point out all the crap that's out on the market, but should be less work to name some names of the companies that are making good products. If there's already a place where I can find such a list, please help me out lol So far the parts I have purchased for my car are, Volk, HKS, AMS, Tanabe, AEM Oh btw ... to Mike and Eric ... thanks for the great public service you guys are providing with this website
Sunday, September 06, 2009 12:14 AM
One of the issues I've run into when attempting to purchase parts for my car is knowing which companies are legit and which are bogus. I obviously do not have the 20+ years of experience like Eric or Mike, and admittedly do not have the full blown passion to research into each company I run into. Would be it possible for a list to be started regarding respectable companies? Like Mike pointed out it would be a ton of work to point out all the crap that's out on the market, but should be less work to name some names of the companies that are making good products. If there's already a place where I can find such a list, please help me out lol So far the parts I have purchased for my car are, Volk, HKS, AMS, Tanabe, AEM Oh btw ... to Mike and Eric ... thanks for the great public service you guys are providing with this website

Sunday, September 06, 2009 10:58 AM
I've had this discussion with a few people in the industry, both on the import and domestic side of the business. There is a cultural problem (stupidity) that exists on the Chinese side of the business. They really don't understand how big (actually, little) the market capitalization is of the industry. The language and baseline difference in character/writting doesn't help. And neither does the internet. All they have to go off of is the internet, so if a part looks popular they just flood the market with volume. Little do they know that ALL 100 of the people that own that part are on the same forum, and that making 2,000 of those parts aren't going to turn over every month. If anyone wants to protect the industry, it is almost better to befriend the Chinese knock-off factories and be their voice of reason and explain to them that they won't sell 25,000 sets of X product because the original manufacturer can't even sell 1/10 of that. The knock-off companies are making money in the developing countries though. The local Kragens of the Eastern block or even Europe carry the stuff like it is legit. Thank god this hasn't happened here yet. But they do have some revenue to keep them going. In a way, though you have to look at the potential side benefit to us: They're seeding the 3rd world with an appreciation for tuning that we can convert to original MFG product as those markets develop. If you're a mfg that doesn't understand the consequences of the FTAs (free trade agreements) that China has established around the world, then you are doing yourself a disservice in this current economic environment. In fact, before you bemoan China too much and hate on them, their brand-conscious 400 thousand strong Millionaires (in $USD) may just be your customer in the future. Take your high end Hong Kong enthusiast's love for JDM as an example . . .

Sunday, September 06, 2009 3:48 PM
Good points Peter. I don't really consider Hong Kong citizens to be "from China" although territorially China does now officially rule Hong Kong. Culturally HK is much different from the rest of China. Perhaps I am biased being Cantonese myself albeit American born. Most HK people at the age where they can afford GTRs and other toys have been schooled through the British school system and have been raised with British ethics and morals. In fact, they are still British citizens by passport. Anyhow, there are already quite a few Chinese millionaires who are buying a ton of Cosworth products for their Fords and Subarus. Luckily, the Chinese millionaires are so damn rich they don't even look for knock offs. It's just like how they buy genuine LV and Gucci for their wives (and mistresses). The Chinese "middle class" isn't quite there yet... Donny: I'll discuss that idea with Mike. For now, you'll just have to ask around to see if the company has an engineering department and research and development program. That is difficult though since some companies will just straight up lie.

Sunday, September 06, 2009 8:16 PM
If I'm a company like Hotshot and the Chinese are ripping off my designs, the last thing I would do is to give them sound business advice to help streamline their company. Why would I want to help them get better at ripping me off. Even though they might be turning people on to tuning, they're still stealing my shit and laughing all the way to the bank. And then they'll use that money to get even bigger and stronger so if they do start selling in the Kragens in the States, I'll have a bigger monster to deal with. There is no consumer connection between the the Chinese millionaires and the Chinese knock off companies because millionaires will always buy the good shit for fear of being laughed at by their millionaire buddies. The hate is on the knock off companies and not China's millionaires. Those two things are not connected. Unless one of these millionaires is a owner of a knock off companies and is selling fake JDM shit and using his profits to buy Cosworth products. How funny is that. The Chinese welcome you in like a good old friend, let you open a factory and learn all they can from you, then open one up themselves right across the street. Or they'll just kick you out because now you're their competitor. I've heard of a lot of small time guys get raped in China. In China, corruption is part of the culture.
Sunday, September 06, 2009 8:19 PM
i am glad we are getting all of these comments, it shows that people still give a shit.

Monday, September 07, 2009 12:51 AM
Jim- I'm not advocating giving the knock off companies sound business advice. In fact, I wish they were smart enough to be convinced not to make knock-offs because the volume doesn't exist to make money. But most of the time they don't believe you. Take for example a friend of mine that developed, makes and sells product X. He only sells 1,000 of that per year, at a margin of like $20 per unit. There literally is not more than 1,000 of that product that could ever possibly be sold. He caught on to a Chinese knock off company that was looking into making that part. Through an intermediary, he tried to convince the factory that there's no money in it for them. They don't believe him. They cant believe that there isn't the potential for 20,000 of product x per year. Because they don't have a clue about the market, they don't believe him. They are going to invest in 10,000 of product X and sell it at a basic % markup based on sales of 10,000 units per year. But 10,000 units of sales is impossible and doesn't exist. But they are too bull-headed and stupid to even understand the reality that is written on the wall. I really don't think that the Chinese knock-off companies are making loads of money on the crap they sell. They need volume to make any money. Having dealt with some of these guys, you come to realize that they aren't completely greedy because they don't know the market most of the time. They just want work. They simply mark up the product some % like 20 and base everything on volume. That's why it is so cheap. The one that makes out are the greedy importers that see like 100-200% markup to the US customer. That's who is driving the ship here. Those are the guys that need to be dealt the biggest blow. The elite will always want elite products. I agree. All I'm saying is to keep an open mind about not entirely pigeon-holing the Chinese with stereotypes. The opportunities aren't just for them selling here, we may be selling there in the future.

Monday, September 07, 2009 12:31 PM
Peter: We importers have a lot of fees that stick us too. From Japan to you: Forwarding agent fees: typically 15%-25% of the purchase price in Japan Trans-Pacific Shipping: Slower is cheaper, but it takes months. Air freight costs well.... I'll give you my address to send your first born. Customs: You bet that one goes up with the value as well. Shipping to your door: We have to use another carrier for that as well. In all importing things gets VERY expensive, rather quickly. Not 200% markup expensive (ok maybe a hood or other aero piece that comes in a large box), but for the most part those guys are being greedy asses, and will get promptly undercut by myself and others like me. Most of us (myself excluded) use Ebay though. One more thing: We're not down on the Chinese, but when a company is producing products with welds inferior to the quality of welds I could produce while TOO DRUNK TO STAND, there's an issue. If I can get a Mexican at the tire and muffler shop across the street from me to weld a cleaner exhaust for less there's issues to be had with that too. I'm not being racist about that either, there really is a Cordova Tire and Muffler place across the street from my house. Big J: You sir gave me a grand idea, however I think I'd have the parts made in Mexico instead of China. I speak Spanish and it would just be a quick drive for me. That and they can weld better. :)
Tuesday, September 08, 2009 1:27 AM
Big J: On top of having production closer to me, due to our free trade agreement with Mexico if I ever get ripped off I CAN take legal action and results WILL occur as a result.

Tuesday, September 08, 2009 2:30 AM
Peter I think it great that there are people posting inside information about the knock off industry. I would love to learn all the details from start to finish, what happens, what are the costs, what are the price points at every stage. But I want people also to answer this question, which I think the article is about. Is it right for people to make copies of other peoples designs? I don't care if they are making just a penny per unit or are losing money. Is it right for people to steal other people's intellectual property? This is the core issue. I say No, stealing is stealing. All this other talk about manufacturing, CAD, import cost, is great, but it's all secondary to this question I'm proposing because if honest companies had the funds to really go after the knock off people, then most of the supply chain comments and discussions about them would not exist to this extent. So your friend sells 1000 units a year and only 1000 can possibly be sold, so that means your friend has cornered the market. I agree that it's dumb to make too much but they probably want a piece of your friend's monopoly. It's their problem to deal with all the extra units. Why should your friend care and give them this advice unless he thinks it will cut into more of his monopoly. I say that a lot of fake things come from China and that the Chinese live in a corrupt system that has permeated into their culture. I don't think I'm stereotyping because I have first hand knowledge. I'm not like someone who has never known any Mexicans and then makes the comment that all Mexicans are lazy. Now that is a stereotype. I know that not all Chinese are bad people, or that every single Chinese company makes knock offs. But I've been in Taiwan for over three and a half years now and I think because of the proximity to China, we get a lot more of their news than the US does. I've been to China personally, and I can speak Mandarin and Taiwanese which helps a lot in gaining insight into the culture. Asian people give Caucasian people special treatment when they come here, so they are treated differently then if they were Asians, and because the majority of Caucasians don't speak the language, they have a way harder time gaining insight into the culture. These stories I've either seen on the news or have heard them from people I know personally. Fake products made from, who knows what stuff. Liqour Beer Soy Sauce Eggs Dim Sum Dumplings Johnny Walker Scotch Toothpaste Cigarettes Killer Baby Milk Powder Rice Tofu Selling dead horse meat. No killing a horse for meat. Cadaver meat. Knock off products or ones that are harmful Apple iphones and cell phones ipods Computers Purses Cars that look like BMW, Mercedes, Rolls Royce Sandals that rot your feet Clothes that give you a body rash, Now night markets have signs saying Made in Taiwan because of this Lead paint in Toys Putting old mattress springs in new mattresses Putting sand it the walls instead of concrete, sand is free at the beach Recycling used Tampons, like it's reusable or something, just wash. Using used condoms for the elastic in woman's hair ties. Fake Police Station, so that their fake cops can go shake down the neighborhood I'm sure if I do a quick search I could find a lot more of this stuff. Why don't I hear on the news Taiwan, India, Vietnam, Korea, flooding the market with a bunch of fake stuff or doing a bunch of immoral things? Why is almost always China? Taiwan is better off than China but I rarely see any modified cars on the streets here. Because the divide between rich and poor is great. There is not a big middle class here in Taiwan. That is the same case in China. If you're telling me in the future China will have a big middle class that the US can start selling to, I wouldn't hold my breath. How corrupt their government is, I just don't see it happening. Why would they buy an expensive imported US product when they can just by their own cheaper knock offs, like the US is doing right now. There is a big difference in the spending habits of the millionaires and the middle class. The middle class in China is someone who can afford to live in a high rise and have a washing machine and dryer, that's a long ways away from buying genuine HKS or Cosworth products. Middle class people in the US can barely do it now. The only way is if there are more millionaires in China and they're not exactly doing so hot right now.
Tuesday, September 08, 2009 11:08 PM
I couldn't agree with you more Mike. I have seen a lot of these cheap parts showing up on cars at the 24 Hours of LeMons. It seems like a good idea, cheap coil overs, but chances are the set up is so wrong, the stock (and balanced) struts or shocks and springs are the better ticket. I won't buy this crap either, I'm down with the ban.

Wednesday, September 09, 2009 9:51 AM
Drew- Importing is definitely not cheap. I just don't think that the actual producers of the product are the ones making out with the cash. The factories aggregate the business, but knowing that all they care about is the work, there is the hope there that they really don't care about performance parts per say. If something more lucrative came around, say paintball guns, then they'd switch and leave the industry alone. Understanding the root cause of the motivation of the source could give us a way to turn these guys away from knocking our stuff off. But, I don't hold any hope. Now regarding Mexico production . . . I'd say good luck. There's a reason why we're right next to Mexico, yet the majority of outsourcing is going to Asia. It isn't just because Asia is cheaper, because theoretically Mexico should be cheaper. But many large US corps have learned their lesson. I have a friend that is in charge of outsourcing for a major tech company and after a few hundred million into Mexico, they were plagued with high employee theft of anything from office supplies to full blown production equipment being loaded into trucks in the middle of the night. In addition to that was a low skilled work force with sub standard levels of education. On top of that, all bids from suppliers were way higher because they tend to mark up like Americans do. The problem with Mexico is a political one. I actually wrote a paper at the University comparing Southeast Asia to Latin America. Even though they have the same per capita budget for education, Latin American countries spent the money to educate their already wealthy few leaving the proletariat with no skills beyond agricultural labor. Whereas southeast Asian countries made sure that everyone at least had a 4th grade education. This means millions of people that can do basic arithmetic, read plans, follow instructions and have the ability to further self educate because they have a higher literacy rate. Bottom Line: Knock Offs suck and shouldn't be supported. They've hurt me personally and many others I know. And they force many companies to make business decisions that are based on price in order to be competitive. Otherwise you go away and can't sell product. Jim- You may not see it now, but the fact that Walmart and Buick is doing well in China is a sign of things to come. They like American products. I think that they will be consumers of American brands in the future.
Wednesday, September 09, 2009 12:06 PM
Amen Mike! Great site with great writers and great content! Congrats!
Wednesday, September 09, 2009 3:24 PM
Benson, is that Jennifer Connoly circa Career Opportunities?
Wednesday, September 09, 2009 3:50 PM
I believe it's slightly more mature Jennifer Connelly than Career Opportunities, but the point is it's hard to tell because she's been hot for the duration of my entire life!

Wednesday, September 09, 2009 7:46 PM
Peter And where are the majority of Walmart products made now? That's right, China! You make it sound like Walmart products were made in America and that the American workers are benefiting from selling to China. The Walmart corporation benefits and not American people /workers. I remember when the Taiwan economy was doing good. A lot of people bought American brands cars too because they like to show off how big they are. But after a short while no one bought them anymore because they realized that they are expensive to repair and are not as well made as Japanese cars. So now the Buicks are replaced by a big Lexus, Mercedes, or BMW. I can tell you that I rarely, if ever, see a Buick on the roads of Taiwan now a days. Like the American auto industry is doing great, BAIL OUT! I wouldn't be surprised if Buick moved their factories to China. Corporations don't give a rats ass about the American worker! So where is this big market for the future American worker (the kids today), China? Think again. I think what ever American product they like in China will be made in China or knocked off in China. In China for China! ICFC! No import costs need apply.
Wednesday, September 09, 2009 9:04 PM
Jim, it's funny you should say that. When's the last time you saw a new model Buick in the US? When I went to China a couple years ago I was bewildered to see so many Buicks. They are the best selling car in China. Where are the most Buicks sold in the world? CHINA. http://www.chinadaily.com.cn/bizchina/2009-07/01/content_8343764.htm

Wednesday, September 09, 2009 9:40 PM
Jim- America is still in a stage of denial, where the American conscience likes to believe that we are still a country of proletariats that want to work in factories. At least, that's what the unions would like to see. Americas kids don't want to "work." America will transform into an idea economy in the future. A country of companies, and not proletariats. You see it now with freeware software apps, and eBay as an economy of many home-based companies. As this evolves, the American proletariat will become CEOs of mini companies, not factory workers. Peddlers of brands, if you will. The goods will be digital, or outsourced because no one in the US will actually make anything anymore. Environmental laws alone stamp out the financial feasibility of manufacturing. So . . . I'm thinking ahead. If big American corporations are finding revenues there now, then it forges the way for the little guy later. If Walmart is bringing revenue back home to the US, guess what's paying payroll taxes and rising health care costs, and trading stocks and paying investor dividends? Either way, it is money coming back to America. Like money that Toyota brings back to Japan in the end, even though they're invested in their American factories. If Walmart keeps their lights on because they made $1 in China, then that greeter at the local Walmart still has a job . . .
Thursday, September 10, 2009 11:12 PM
Love this article. Thanks Mike! Love the site\content. I personally know how this has affected us.

Friday, September 11, 2009 12:55 AM
Eric I know that a lot of Chinese must be first time car buyers and that's why they're buying Buicks. Or it's in the trade agreement somewhere that since we're buying your crap, you have to buy some of ours. I found this interesting bit in Newsweek. Japanese makers also hope to benefit from changing perceptions about vehicle safety. In particular, they hope to increase sales by challenging a view that their generally lighter vehicles aren't as safe as rivals', even though they are regularly among the best performers in China's crash tests, which were introduced in 2006. "We use high-tension, thin steel, and some customers believe that if [carmakers] use thicker steel, it's stronger; yet it's Japanese brands which are often getting five-star ratings," says Yomura. Then there's the impact of the U.S. and other markets where Japanese brands are already strong. Yuzo Ushiyama, a managing officer for Toyota with responsibility for China, says one reason for the popularity of the Camry in China is its popularity among Americans. "Chinese people, through the Internet, know this," he says. "That very good performance in other markets works to our benefit in China." http://www.businessweek.com/globalbiz/content/jan2008/gb20080118_414576_page_2.htm Thicker is stronger, sounds like bigger is better huh? They probably equate that a great country like the US must also make great stuff. But after their Buicks start to eat shit, they'll come to learn what we already know. Peter One thing I have to say first is don't pu pu on the Unions so fast. I know it is popular to do so now a days. But all working Americans owe a debt of gratitude to the Unions. Why? 40 hour work week instead of 80 or whatever the boss decides Safe working environment Child labor laws Don't forget that America was like China in the early industrial age, and it was the Union people who protested and fought and died on the streets against the cops and hired thugs to give the modern American a better work place. I know the Chinese sweat shop factory workers would LOVE to have the things that we take for granted. Americans kids are spoiled. They have a masters degree and want to find a perfect job they love. Working at McDonald's is beneath them so they stay unemployed and live with their parents until that perfect job comes along. Someday... I'm not understanding you clearly. American proletariat will become CEOs of mini companies, not factory workers. Peddlers of brands, if you will. So they'll all open they're own businesses, become CEOs, and sell who's brands? Are you saying that America will become a nation made entirely of bosses and their factory workers and underlings will be China? There's a big difference between a big corporation and an individual trying to find revenue in China. A lot of Taiwanese individuals have gotten fucked over trying to get something going in China. Anybody in the world can buy walmart stock. There are probably as many people working at a supermarket as there are in walmart or any big box store. It's not like these box stores support a community of workers. And big corporations do not pay their fair share in taxes because they use dummy off shore companies, which they own themselves, to right off as much tax as they can as payment to them for whatever services, let's say consulting. Walmart is not really helping the American economy as much as people think they are. They sell in the US but all of their manufacturing spending is in China. They're helping China way more than the US. I think the walmart greeter is the future of the American worker if we don't do something about it. Most Americans will only have service sector jobs left. Please clarify. Thank you.
Friday, September 11, 2009 12:58 AM
Benson: seriously, she is holding up pretty damn good for being cougar aged now. Jim & Pete: you both have good points. Either way China owns 60% of the US so we're fucked anyway. Or are children will be...
Friday, September 11, 2009 9:59 AM
Hey Mike, we're behind you over at www.sr20-forum.com 98.5%. To find out what that means, you should read the discussion we had last year. http://www.sr20-forum.com/turbo/12249-admin-lock-plz.html Nothing new to you I'm sure, but the spirit behind the posts is worth the read. Also I mention an exception to the rule and defend it in post # 89. Not trying to drive traffic over there (the thread was locked long ago), just don't think I could explain it better in a post here.
Friday, September 11, 2009 5:26 PM
MK, what are your thoughts on the Mike Smith vs AMS fiasco? Do they fall into the cheap copy-cat parts category? Or is it one business taking advantage of a marketing opportunity? I posted my thought in the Group section.
Friday, September 11, 2009 6:01 PM
Eric and I took on the fake AMS (not the real AMS the EVO tuners) and squarely support Mike Smith. I got banned from their 300ZX forums and Eric pointed them out in BTD.
Saturday, September 12, 2009 11:35 AM
Canyoncarver, the fake AMS copies almost all of "their" products. They've done it to us and MSP.
Saturday, September 12, 2009 4:02 PM
Well the US has placed tariffs on Chinese tires now, but it was only to help boost american tire manufacturers.
Wednesday, September 23, 2009 7:10 PM
AdamR: Its for added safety too. There's little to no QA in Chinese tires. The tariffs force them off the market by moving them up price points, into areas they can't compete in.
Thursday, September 24, 2009 7:28 AM
What gets me too Mike is to see companies within the US copying others with no respect to the originator. They go about advertising it as if they started the trend as well. Its quite frustrating to say the least. Im being copied as we speak on my build practices and components. It pulls from my pocket and customer base but all I can hope is that my quality (far better than what I've seen out on the market for my community) maintains its proper view in my customers eyes. There are so many companies out there selling the knock off parts just so their wallets get fat. The passion that used to drive us to make parts is now enveloped into greed for money for the business owners.
Tuesday, December 29, 2009 11:35 AM
don't be too fooled by the new tariff on the tires. they only adjusted their capacity to other SE Asian countries like Malaysia and Indonesia and are importing direct from their now. It won't put them out of the current market too much. I worked for a chinese tire company recently and still have contacts inside on their strategies.
 
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