In many cases, authorities are ill-equipped to handle the sheer volume of rip-off artists. In one instance, a facility that produces knock-off oil seals gets shut down once a year only to re-open at full capacity. That plant had the capacity to produce seven million fake oil seals per year in 2008. Now that number is up to 10 million.
In the case of the seals, the manufacturer uses low-grade rubber and metal to cut costs, and as a result, the fake pieces carry a price tag that's less than half of the genuine article. They're also almost guaranteed to fail.
Meanwhile, legitimate Chinese companies are beginning to fit their boxes with radio frequency ID tags to distinguish their products from the fakes.
[Source: Automotive News China - Sub. Req.]