UM Motorcycles Shuts Shop In India, Dealers Send Legal Notice
UM Motorcycles, a niche motorcycle brand that entered India in 2016 in a joint venture with Lohia Auto, has stopped operations in India. What’s worse is that it has left its dealers in the lurch, so much so, that the Federation of Automobile Dealers Association (FADA) has sent a legal notice to the company to redress all its dealers issues and compensate them for unsold inventory.
At the same time, customers of UM Motorcycles, who bought bikes like the Renegade Commando, will now face a tough time getting parts and service for their bikes.
UM’s woes began in April 2019, when it couldn’t meet the deadline for equipping their bikes with ABS as per law, and hence production was temporarily halted. UM bikes are built with 40 percent local content, while the rest of the parts are sourced from other countries like Thailand and Indonesia, although dealers allege that most components come from China.
According to a press release sent by FADA: “The dealers are aggrieved by the dishonesty and fraud on part of the management and promoters of UM Lohia, including founders Ayush Kumar Lohia and 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 press release goes on to state that consumer interest dropped in UM leading to losses for dealers:
“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.”FADA Press Statement
Dealers also allege that UM’s timing of its products was wrong. When India was shifting to BS-IV emission standards in 2017, UM entered the market in late 2016 with BS-III compliant products. As soon as the ban on BS-III vehicles came into the market in April 2017, dealers were left with unsold inventory and they allege that UM refused to compensate dealers for unsellable stock.
While the brand exits India, customers of UM motorcycles are going to be left high and dry. They will have to resort to importing parts or fabricating them for their bikes. This exit comes at a time when the auto industry in India is already facing a downturn. UM’s last launch in India was the Renegade Commando, a 300 cc bike priced at Rs 1.89 lakh, in September 2017.
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