Aston Martin’s lesson in due diligence
Aston Martin, the automobile brand with James Bond drive, recently recalled more than 17,000 of its high-end sports cars due to a faulty accelerator pedal sourced from a factory in China. The Chinese government accused the British company of starting a blame game, saying it was negligent of due diligence.
At China Blueprint we encounter a lot of aspiring importers who believe that the sourcing of products in China is simply plug and play – just like bringing home a new gadget. This notion is totally mistaken, especially when it comes to selecting the right materials for products. The responsibility for the quality of materials is entirely on the importer.
No more “cheap China”
Luxury-car maker Aston Martin, has allegedly recalled 17,950 of its sports cars to replace a faulty accelerator pedal arm. It maintains that Shenzhen Kexiang Mould Tool Co Ltd, a southern China-based subcontractor that moulds the affected accelerator pedal arms, was using counterfeit DuPont plastic material. Documents submitted to the US regulator stated Kexiang was a third-tier supplier contracted to mould accelerator pedal arms by a Hong Kong company, Fast Forward Tooling, which in turn was contracted by a manufacturer based in Britain.
Whatever happened in this case, it is clear that due diligence was not done and that the Chinese government will not tolerate a blame game directed at its manufacturers.
Through its mouthpiece news agency, Xinhua, the Chinese government came out in support of manufacturers that have been blamed for faulty parts and product recalls abroad. As manufacturing becomes more specialised in China, the government is understandably trying to discourage the “cheap China” reputation and encourage an understanding of the complexity of its manufacturing capabilities. Fair enough.
Due diligence for all!
It’s good to start off the process of sourcing your product in China with an understanding of the product’s value – in terms of cost and your brand. If your product is a good quality one, then you need to pay particular attention to materials and where they come from. You cannot expect the factory to do this for you.
Factories cannot be blamed if you neglect to thoroughly research materials. This involves choosing the materials, finding a supplier, doing due diligence on that supplier and making sure that your chosen supplier provides the correct materials to the factory. Each of these steps needs to be minutely documented – right down to the chemical composition of each component – so that you can ensure your product meets the standards of your brand.
Chain, chain, chain
Let’s take a close look at Aston Martin’s supply chain. Aston Martin contacts a Hong Kong trading company. The Hong Kong trading company contacts the Dongguan-based third-party supplier. The third-party supplier outsources the bill of materials to an unregistered materials supplier that allegedly came up with the fake DuPont product. Result? A very expensive recall that has not only damaged the brand, but also annoyed the Chinese government – something you really don’t want to do.
If this sounds similar to he way you are doing business in China, you should be very cautious. When big wheels like Aston Martin can get caught out, then so can you. On top of that, and clearly stating the obvious, the Chinese government is even saying do your due diligence and if you don’t, then its your own fault.
What’s more, we agree. That’s why we provide due diligence advice and services at home and on the ground in China. Contact us – we’re much more plug and play.