BMW Makes Big Investment to Fight Counterfeiting

Counterfeit automotive parts are big business. The U.S. Department of Commerce has estimated that the industry is now worth about $45 billion.

With the advent of online retail, it's becoming more difficult for the average consumer to differentiate certified parts from fakes. Amazon said that it seized and destroyed more than 2 million counterfeit products in 2020 alone.

One company believes that it has a solution to that problem, and it just got the backing of BMW to tackle it. Alitheon, a Washington-based startup, has developed a "digital fingerprinting" technology that can analyze an item and tell you whether or not that item is a certified part or if it's a fake.

CEO Roei Ganzarski told Newsweek that because of the nature of mass production, a machine producing thousands of the same product every day will do so to exact specifications with only minute differences.

Using cloud computing databases, the technology can match a picture that someone has taken of the product in question with the physical attributes of the corresponding product that comes from the manufacturing process.

"We have been able to create a system that can identify those minute features and aspects that come out of production and capture them as a digital fingerprint, or what we call a FeaturePrint," he explained. "We can then use that digital file to authenticate or identify what that item was or is."

BMW i Ventures has made an investment in the company, though amounts have not been disclosed. I Ventures is the German automaker's venture capital arm, which routinely makes investments in startups developing technologies with automotive and manufacturing applications.

Ganzarski argues that in a world where many supposed authenticators can easily be faked, like barcode and serial numbers, matching a product with its factory of origin - or even machine of origin - makes it easier for businesses and consumers to trust what they're buying.

It can also be helpful when identifying parts in a recall. If a driver has an Alitheon app on their phone, they can snap a photo of a part mentioned in that vehicle's recall to see if it's from a group that's defective. That saves them a trip to a dealership if they don't have the defective part.

As more 3D-printed parts make their way into vehicles, Ganzarski says that anyone with a 3D printer could reproduce one of those components. Dealerships using Alitheon software could quickly identify if a defective part is actually from their supply chain before honoring any warranties.

Alitheon currently only works with business-to-consumer and business-to-business clients, but in the near future the company wants to make their software available to consumers through a downloadable app on their phones.

The company wants to gear their services towards consumers who want to authenticate their valuables, be it car parts, baseball cards or other items. When that's released, Ganzarski envisions a structure where a certain number of items will be free for customers to register. After a certain threshold, a subscription model may be introduced.

An American automaker and a European automaker have contracted the company to implement this technology into their systems for cost reduction and service applications, he says, though non-disclosure agreements prevent him from revealing which ones.

Ganzarski argues that this technology can also help with supply chain issues, where manufacturers can distinguish between high-quality and low-quality chips as they work to alleviate shortages. Learning which is which can save a carmaker time and money.

"With our system, we can actually counter the counterfeits simply by taking a photo," he said. "The importance of this technology, of not being able to be tampered with, is getting bigger and bigger as our world gets more complex."