FADA issues legal notice to UM Lohia

Federation of Automobile Dealers Association (FADA) has issued a legal notice to UM Lohia after the company ceased its operations in India.

The statement states that the closure of operations has resulted in huge losses to dealers. The dealers have also been exposed to litigations from customers.

Earlier this month, it was reported that UM Lohia had stopped operations following a dispute with its US-based partner UM Motorcycles. Production had been stopped leading to lay-offs.

UM Motorcycles and Lohia Auto formed a joint venture in 2014 and had set up a manufacturing plant in the state of Uttarakhand. The company was offering its Renegade series of cruiser bikes in India. These were essentially Chinese motorcycles. Consumer interest dipped as no one wanted to purchase 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.

Back in 2016, UM Lohia introduced BS-III motorcycles, at a time when BS-IV norms were set to come into effect. As a result, dealers were left with inventories of unsold BS-III bikes, for which UM Lohia refused to compensate them. It was only after much cajoling that the company 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 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.