FADA Expresses Concerns Over Illegal Multi-Brand Two-Wheeler Retail Outlets

The Federation of Automobile Dealers Associations (FADA) has expressed its concerns over illegal practices of unauthorised multi-brand outlets (MBOs) selling two-wheelers. Without naming any multi-brand dealers, FADA has said that the body has reached out to Delhi and Mumbai State Transport Departments over the issue, urging the authorities to take action against such dealers.

According to FADA, some unauthorised MBOs are acquiring unregistered vehicles in bulk from dealers and reselling them to customers at discounted rates. FADA also reports that these MBOs don’t offer any after-sales service, and also indulge in tax evasion, issuing fake/undervalued insurance policies, and other illegal practices. The MBOs are also reported to deliver the vehicles without registration and without helmets.

Also read: FADA Sales April 2023; Total Vehicle Retail Sales Show A Four Per Cent Decline; Three-Wheeler Showed A YoY Growth Of 57 Per Cent

Multiple authorities spoke out supporting FADA against illegal MBOs. Kailash Gahlot, Transport & Environment Minister of Delhi said, “Delhi govt will not tolerate any such illegal activity or corruption. We are committed to take action against any such instance”.

Ashish Kundra, Principal Secretary cum Transport Commissioner, Transport Department of NCT Delhi said, “FADA has been working closely with the dealer fraternity and the government to maintain a healthy and lawful business environment in the region. A legal notice has been issued to all the involved parties, and their respective trade certificates have been put under the scanner."

Vivek L Bhimanser, Transport Commissioner, Maharashtra added, “All parties concerned have been given legal notice. We have cancelled the trade plate of dealers supplying vehicles to unauthorised Multi-Brand Outlets & have impounded vehicles stationed at such unlawful outlets. We have impounded over 6,000 vehicles, and trade certificates of over 50 dealers have been suspended for a week as of now”.

Also read: FADA Sales FY2023: Passenger Vehicle Sales Hit Record High; 2-Wheeler Sales At Seven-Year Low

Manish Raj Singhania, President of FADA said, “We have raised the issue of unauthorised multi-brand outlets (MBOs) in the 2-wheeler industry, which are not certified as bona fide dealers and sell unregistered vehicles without any trade certificates or after-sales services. This has caused many legitimate two-wheeler dealerships to shut down, making their businesses unviable. Such activities not only tarnish the image of dealerships but also harm brand image and values.”

FADA has also stated that it has reached out to Eknath Shinde, Chief Minister of the Government of Maharashtra, and the Transport Commissioners of Mumbai and Delhi regarding the issue. It has also reached out to Vinod Aggarwal, the president of SIAM (Society of Indian Automobile Manufacturers) requesting the organisation to raise the issue with concerned OEMs to amend their sales process.

FADA says that ensuring no supply of new/unregistered vehicles to unauthorised outlets “will have a great impact in eliminating the multi-brand outlet menace and building the credibility of the entire Auto Industry.” FADA also added that not only are the practices illegal, but they also damage the revenue generation causing “massive losses to the government and society and lead to significant loss of motivation among dealers, leading to greater loss of employment opportunities.”

Representational images