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| NEW DELHI: American bikemaker UM Motorcycles has stopped its operations completely due to a dispute with its local joint venture partner Lohia Auto. Several people confirmed to ETAuto that either of the parties isn't planning any effort to revive the brand, thereby jeopardising businesses of its dealer partners across the country. Anticipating no support from either of the joint venture partners, most dealers have shut their shops and the remaining few are servicing sold products, people familiar with the matter told ETAuto. “The company has stopped production at its Kashipur plant. And every two months, the company is hinting that they will start operations but there is no positive sign.” a Meerut based dealer said. |
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Originally Posted by TSIboy
(Post 4672458)
I think they would have had a better chance if they entered right now when new brands are getting a positive response (MG, Kia). |
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Originally Posted by gopalnt
(Post 4672951)
Isnt MG doing the same thing? Calling themselves "European" when they are actually a Chinese brand now? I agree that their attitude may be better than UM though. |
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Originally Posted by GTO
(Post 4672446)
I never trusted them because of their lies. "We are American" when in fact, they were only selling re-branded Chinese bikes. Customers & dealers have to be wary of fresh new brands (unless it's a big international one like Kia or MG). |
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Originally Posted by ani_meher
(Post 4673054)
Quality of UM bikes was visibly appalling from the get-go. I didn't even dare to test drive them, looking at the wobbly crude panels and dials. I never trusted them because of their lies. "We are British" when in fact, they were only selling re-branded Chinese cars. I wonder how is MG any different in their branding? |
| The Federation of Automobile Dealers Association (FADA) has taken up the cause of the dealers of ‘UM Motorcycles’, which motorcycles are manufactured and sold in India by UM Lohia Two Wheelers Pvt. Ltd (UM Lohia). UM Lohia is a joint venture between the Lohia Group and UM Motorcycles, an American motorcycle company. The joint venture was set up in 2016 to manufacture and sell in India ‘American’ style motorcycles under the brand of ‘UM Motorcycles’. The dealers are aggrieved by the dishonesty and fraud on part of the management and promoters of UM Lohia, including founders Mr. Ayush Kumar Lohia and Mr. Jose Miguel Villegas, which has plagued the relationship between them since beginning and has caused huge losses to dealers as well as exposed them to unwarranted litigation from customers of UM Motorcycles. The dealers’ woes began as soon as UM Lohia entered the market with its motorcycles. It soon came to light that the so called ‘American’ motorcycles were actually being assembled from Chinese parts at UM Lohia’s manufacturing plant in Kashipur, Uttar Pradesh. Consumer interest immediately dipped as no one wanted to purchase cheap Chinese replicas of ‘American’ motorcycles. The brand lost its value, and with it the investments of dealers, who were now holding a product few desired. Further, at the time when the entire automobile industry in India was moving towards BS-IV emission standards, UM Lohia chose to enter the market by introducing BS-III motorcycles in the 2nd half of 2016, even though, the ban on sale of BS-III vehicles was to take effect in a few months, from April 2017. As soon as the ban on BS-III vehicles came into effect, the dealers of UM Lohia were left with a huge inventory of BS-III motorcycles which was not only undesired by customers but now also legally unsellable. UM Lohia, however, refused to compensate dealers for this unsellable stock and also refused to return the advance payments given by many dealers. It is only after much cajoling that UM Lohia even acknowledged the problem. Even then, instead of buying back the BS-III motorcycles from the dealers and returning their advances, UM Lohia came up with the scheme to sell BS-IV motorcycles to dealers in lieu of their stock of BS-III motorcycles and advances. However, the BS-IV motorcycles supplied by UM Lohia were entirely unfit to ply on roads with several basic components such as EFI Module controller and Gear breaking down within few days of use of the motorcycles by the customers. To make matters worse, UM Lohia has now surreptitiously folded up its operations and shut down its warehouse for spare parts making it impossible for dealers to service the warranty claims on the defective UM motorcycles. As a result, many dealers have been exposed to litigation from customers of UM motorcycles. In all this, UM Lohia, its promoters and its management, have shown no inclination or interest in resolving the dealers’ grievances, despite several attempts made by the dealers, first themselves, and then, through FADA. The promoters of UM Lohia have now started new ventures – the Lohia group is now investing in the e-vehicles segment and once again finding dealers for this new venture. Accordingly, to protect the interests of the customers and the dealers, 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. If UM Lohia & its management does not respond to our legal notice, FADA will have no other option but to take appropriate legal measures against the Company, its Management and all others concerned with this matter. Simultaneously, FADA will also update and involve Government Authorities in this matter. |
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Originally Posted by GTO
(Post 4679711)
This just in from the FADA: |
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