UM Lohia has been issued a legal notice through FADA for dealer losses, customer litigation and other issues
UM Lohia is a JV between Lohia Group and American-based UM Motorcycles. The joint venture was established three years ago in an aim to retail motorcycles with American flavour under the brand of ‘UM Motorcycles’. However, things did not pan out as planned, which has led to the Federation of Automobile Dealers Association (FADA) taking up the matter.
The dealers of UM Lohia Two Wheelers Pvt. Ltd were in deep trouble since the very beginning. UM Lohia’s endorsed American styled motorcycles were assembled from Chinese parts at the production base in Kashipur, Uttar Pradesh and as soon as the customers got to know about the brand, the interest rate certainly declined as none wanted to purchase them.
In short, the UM Lohia motorcycles looked like the cheap replicas of popular American models and the company lost its value altogether with declining sales numbers. This resulted in dealers losing their invested money and felt disgruntled about the indignified and fraudulent behaviour of the management and promoters of UM Lohia that include founders Ayush Kumar Lohia and Jose Miguel Villegas.
Alongside the reported huge losses, the dealers were also exposed to unwarranted litigation from customers of UM Lohia. Moreover, the brand entered the domestic market with BS3 motorcycles in the final half of 2016 when all the manufacturers were switching to BS4 standards. This led to a huge pile of inventories when the BS4 norms kicked in from April 2017.
They became illegal and could not be sold but UM Lohia offered not to issue any compensation to the dealers while the return of the advanced payments given by the dealers was also denied. To settle this issue, UM Lohia agreed to replace the BS3 motorcycles and advanced with the supply of BS4 motorcycles and they were deemed unfit to be on the roads with failure of components such as EFI Module controller and gearbox within few days of purchase.
Since UM Lohia is folded for good, dealers could not access the warehouse for spare parts and thereby unable to service the warranty claims for the defective bikes of the affected customers resulting in litigation. Despite several attempts from dealers through FADA, UM Lohia showed little interest to resolve the persisting problems.
The promoters of UM Lohia have now begun investing in electric vehicles and once again finding dealers much to the disgruntlement of the dealers. If the company does not respond to the legal notice issued in the interest of customers and dealers through FADA to fix the issues, there will be no other option than to take legal measures against the firm, its management and everyone involved according to the statement released.