[anjan_c2007]

And after encountering illegalities and scams in every other sphere of life and living, here is the latest on the two wheeler dealership front.

Thd Federation of Automobile Dealers Association (FADA) has expressed concern over mushrooming of unlicensed and illegal dealerships for two wheelers that are dodging the government, the customers and also licenced dealers with their brand new, dubious ingenuities.These sell unregistered vehicles without any trade certificates or without committment for any after sales service.



They are multibrand outlets (MBO's), a Western concept, that would make potential customers go ga ga over it. The dealerships acquire unregistered vehicles in bulk from dealers (are these dealers not FADA members?) and resell or retail these at discounted rates. After sales service is not a commitment. They thrive on the "sell it, forget it" adage. Further they evade GST, income tax, issue fake or undervalued insurance policies and deliver vehicles without RTO registration/ HRSP and helmets.

According to FADA, they have complained to government functionaries and to the Society of Indian Automobile Manufacturers (SIAM). The Delhi government it appears has launched a crackdown on such Humpty Dumpty dealerships.FADA says legitimate dealerships are getting affected and closures too are reported due to these non-bona-fide dealers.

Can the licenced dealers not smell a rat when such bulk orders are placed by Humptys and Dumptys to enquire about their bona fides ?The FADA member-dealers who are fuelling growth of such illegal dealerships through bulk sales to them need to be strictly dealt with by the Association and OEM's. Their dealerships need to be suspended/cancelled by OEM's after issuing them show cause notices and giving them an opportunity to be heard.

The enemy is within and FADA needs to weed out such bulk-selling by licenced dealers who provide oxygen for breathing to the Humpty Dumpty dealers prior to crying wolf.

[Iyencar]

I’m not gonna lie, I thought Humpty Dumpty was the name of a new Chinese produced, Indian labelled two wheeler scooter brand.

[saket77]

Is it not illegal to sell un-registered vehicles by the main dealership itself in first place? How can then anyone, esp. so called 'fake' dealerships, buy unregistered vehicles in bulk? If that is the case, will it not be more effective to stop such sales at the main dealership itself which is operating under the OEM?

Originally Posted by Iyencar

I’m not gonna lie, I thought Humpty Dumpty was the name of a new Chinese produced, Indian labelled two wheeler scooter brand.

Man, if you are lying, then you have a good sense of humour.

[bharat.joshi]

I feel like I have a different take on this news that it is not the problem of the average customers nor the MBO's.

Firstly, buying a 2-wheeler or even a 4-wheeler from Authorized Showrooms is a tense and stressful ordeal as it is. I have personally heard many stories of dealers over-pricing, scamming and cheating customers without any remorse whatsoever during both the buying and the aftersales part of ownership of the vehicles. If an MBO is selling the same product at less price and lesser hassle then customers are definitely going to flock to them. If a customer with a limited budget and just looking for an A to B vehicle can get even a Rs.5000 discount over the on-road price at an Authorised dealer at an MBO then they will go to the MBO.

Secondly, a majority of these MBO's operate in small cities of tier 2 or less and rural areas where the level of enforcement of rules is virtually non-existent and purchasing power is limited. The local authorities are not too concerned about rules and regulations beyond a certain point, local population is not concerned about brand loyalty and the after-sales aspect is also not really given much importance beyond the bare-basic repair when it is needed.

Lastly, the fact I have heard in marketing books and movies time and time again is that "When there is a Demand, there will be a Market". This is clearly a FADA problem created by FADA themselves and the average customer and MBO's are just being made the scape goats.

[GTO]

I don't remember the last time FADA did anything that was "customer centric". On the other hand, just like SIAM is for car manufacturers, all FADA does is whine, cry & try to lobby. Good thing that no one in the Delhi corridors of power listens to either SIAM or FADA.

They are complaining about "illegal" practices of multi-brand outlets. What about their own dealerships? This is specific to the ethics & operations of each individual dealership - we cannot paint all multi-brand outlets with the same brush.

FADA has reported that these MBOs are acquiring unregistered vehicles in bulk from dealers and reselling them to customers at discounted rates, higher than the prices offered by original equipment manufacturers (OEMs) through authorized dealers, without any commitment to after-sales service

the hypocrisy!

While I agree that multi-brand outlets are subject to lesser levels of compliance than authorised dealers (basically due to the oversight of OEMs, legal implications etc.), we cannot state all of them are running illegal operations. There are many that are solid businesses taking care of customers. Just like the authorised dealers, there are good apples & bad apples.

FADA is just sore about more business / customers going to these outlets. They want to "control" the retail channel as much as possible. On the other hand, I am of the opinion that multi-brand outlets are great for customers. More the competition, better the things get for us end users.

[buzzy_boy]

If FADA wants a rural customer to travel ~50 KMs to their showrooms, only then to be ill-treated, they can eat their humble pie.

50 KMs is the average distance to an authorised showroom from rural areas in an industrialized state. It'll be much higher in others.

MBOs cater to a real business need that FADA members have zero intention to serve.

[McLaren Rulez]

The sooner manufacturers sell direct to customers, the better. Dealerships are just an annoying relic of history. The direct sale method saves customers money and involves far less hassle.