FADA Issues Legal Notice To UM Motorcycles

The Federation of Automobile Dealers Association or FADA has slapped UM Motorcycles and its management with a legal notice. FADA says that UM Motorcycles, under Ayush Lohia and Jose Miguel Villegas has been unsympathetic towards UM Motorcycles dealers. UM Lohia is a joint venture between the Lohia Group and UM Motorcycles which is an American motorcycle company. The joint venture was set up in 2016 to sell and manufacture motorcycles under the brand of 'UM Motorcycles', with company having its plant in Kashipur, Uttar Pradesh. UM's last launch in India was the UM Renegade Classic, which was launched in September 2017.

UM Motorcycles ceased its operations in India earlier this year and this has caused major losses to about 80 dealers who had invested about Rs. 150 crore in total. Service and spares are becoming a major problem as the company's spare parts warehouses have been shut as well. Plus, these dealers have a huge stock of BS3 motorcycles which cannot be sold in India now. FADA says that UM has refused to compensate dealers for the remaining stock and is not returning the advance payment to the dealers as well.

FADA also said that the company came up with a scheme of selling BS4 motorcycles to dealers in lieu of their BS3 stock and advances, which didn't sit well with the dealers as the BS-IV UM bikes were missing major components such as Electronic Fuel Injector module controller and so on and so forth. Plus, with no spares and service backup, more and more customers are becoming agitated and sending litigations to which the dealers have no answers.

FADA, through its counsel Khaitan & Co, has issued a legal notice to UM Lohia and its management, calling upon them to redress all grievances of dealers relating to the losses suffered by dealers due to actions of UM Lohia and to take steps to ensure the maintenance and servicing of motorcycles already sold in accordance with the warranty terms and law.