Car Companies See Counterfeits in China

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BMW is suing Chinese car maker Shuanghuan Automobile for producing an SUV called the CEO, which the Germany company says is a copy of its X5.

And, that may not be the end of it. According to The New York Times Daimler "is taking legal action against Shuanghuan to prevent it from selling the Noble, a subcompact that bears an uncanny resemblance to Daimler’s Smart minicar." GM (GM) and Honda (HMC) have voiced concerns along the same lines.

These legal actions are almost certainly the beginning of what will become a multi-year battle between Western car makers and their Chinese counterparts. Companies like GM and VW team up with local manufacturers to build and market cars into the Chinese markets only to find that the local companies begin independent ventures of their own.

These joint ventures complicate intellectual property matters. Did a Chinese car company learn design elements as part of a partnership or did it outright steal a design?

As China becomes the No.2 car market in the world behind the US and foreign companies take much of the car industry, the communist government may turn a blind eye to practices their get their own automotive companies back in the game.

And, if the government will do nothing, there is nothing to be done.

Douglas A. McIntyre