UM Lohia joint venture gets legal notice from FADA for dishonesty and fraud.
After the recent report of UM Motorcycles stopping production due to a dispute in the two companies, the JV has now got a legal notice from FADA. The Federation of Automobile Dealers Association (FADA) has issued a legal notice to UM Lohia and its management through its counsel Khaitan & Co.
FADA has taken up the cause of the dealers of UM Motorcycles. The dealers are facing heavy losses and unwarranted litigation from UM Motorcycles owners.
The UM Motorcycles brand was launched in 2016 and they promoted the bikes as American products. The bikes were assembled with cheap Chinese parts and soon after the launch, customers lost interest in the brand.
In 2016 when the market was shifting to BS4 two-wheelers, UM introduced BS3 products. April 2017 onwards when the ban on sale of BS3 vehicles took place, the dealers were left with a huge BS3 inventory.
UM Lohia refused to compensate dealers for this unsellable stock and they also refused to return the advance payments done by many dealers. Now instead of buying back BS3 motorcycles from dealers, UM Lohia offered to sell BS4 motorcycles to dealers in lieu of their stock of BS3 motorcycles and advances.
However, the BS4 motorcycles supplied by UM Lohia were unfit to ply on roads as EFI Module controller and gearbox broke down within a few days of use by the customers.
Now the JV has completely stopped its operations and shut down the warehouse for spare parts. This makes it difficult for the dealers to service the warranty claims on the defective UM bikes. This has made customers take legal action against the dealerships.
Despite all the attempts by the dealers, UM Lohia is showing no interest in resolving the matter. The JV has instead started investing in new electric vehicle ventures. FADA will involve Government Authorities in this matter soon.
UM Lohia Legal Notice
– The joint venture and its management gets notice for fraud and dishonesty
– Dealers are facing huge loss
– UM Motorcycles customers are taking legal action against the dealers