UM Lohia India gets legal notice from Federation of Automobiles Dealers Association

UM Motorcycles and Lohia Auto have parted ways, and the production of the products from the American two-wheeler brand at the Kashipur, Uttar Pradesh plant has been completely stopped. The two brands have no plans to revive operations.

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The woes for the two brands continue as the Federation of Automobile Dealers Association (FADA) has slapped a legal notice against UM Lohia. An official statement from FADA points out all the issues that the dealers have faced ever since the partnership started rolling out its products. The statement called UM Motor products “cheap Chinese replicas of ‘American’ motorcycles”. The statement from FADA said:

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.

The statement also pointed out the flaws in the company’s product strategy. UM Motorcycles started its operations with the launch of BS-III motorcycles in the second half of 2016, which was mere months away from the BS-IV upgrade deadline (April 2017). This left the dealers with a large inventory. The statement added that UM denied from compensating the dealers for the unsold vehicles, which they could not legally sell after April 2017.

The statement from FADA added:

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 were 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.

The halt in production has also affected the availability of spare parts for the motorcycles. FADA states that the lack of spare parts has affected the service and warranty claims. FADA has asked UM Lohia and its management to take necessary steps to ensure to address the issue. The statement added:

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.

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Apart from UM Lohia, another brand has wrapped up its operations in the Indian market, Cleveland Cyclewerks.