Federation of Automobile Dealer Association (FADA), the apex body for automobile dealers has issued a legal notice to UM Lohia after the company shut its operations in the country, leaving its 80 dealerships across the country high and dry. Reportedly, Rs 150 crore had been invested by the 80 dealerships and the shutdown has affected 2,500 jobs across these dealerships. If you aren’t aware, UM had been selling the Renegade and Commando motorcycles in India
UM was initially marketed as an American brand by Lohia Auto. As per the release, UM Lohia dealers weren’t aware that the motorcycles were using Chinese components and were being assembled in Kashipur, Uttar Pradesh. Another issue raised by the dealers was that the company was rolling out BS-III motorcycles while other manufacturers were gearing up for BS-IV products. Apparently, the dealers were denied compensation once BS-IV standards came into effect in April 2017.
As per FADA, the brand shut the production in October 2018 including its warehouse, making it impossible for the dealers to source spare parts for the motorcycles already sold or for those which are still under warranty.
Right now, FADA has sent a legal notice through its counsel and if UML doesn’t address the dealer’s grievances, the dealer authority will be moving to take legal action and involve the Government authorities.