The Financial Times reports that Volkswagen‘s parts dispute with its Chinese joint venture partner, Shanghai Automotive Industry Corp (SAIC), has now been resolved. The dispute concerns original Volkswagen parts turning up in a model produced by a rival Chinese carmaker, SAIC Chery Automobile, that is part owned by SAIC.

Bernd Leissner, Asia- Pacific president of Volkswagen, told the FT that the dispute had now been resolved and relations with SAIC were back on track.

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“We had a little fight over some questions, for sure, but it was a nice fight and finally we came out with a conclusion,” he told the newspaper.

He said that Volkswagen parts will no longer be used in the model in question (a rapidly growing top seller that undercuts competitor models such as Shanghai Volkswagen’s Santana).

However, the FT report says that SAIC Chery Automobile has found a way to circumvent Volkswagen’s concerns by obtaining replacement non-VW branded parts instead. Ji Baolong, sales manager at Chery, is quoted in the report as saying that the company has developed its own parts and no longer needs the VW ones.

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The case highlights the risks associated with doing business in China and will make executives in overseas car companies with manufacturing investments in China uncomfortable.

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Another VW executive told the FT that it was not possible to take SAIC Chery Automobile to court because of the difficulty of proving culpability.

Talk of a ‘counterfeiting culture’ and intellectual property abuse abounds in China across many industries, including automotive.