FADA urges action against unauthorized multi-brand outlets selling two-wheelers

Federation of Automobile Dealers Associations (FADA) on Tuesday urged strict action against unauthorised multi-brand outlets illegally selling two-wheelers due to which legitimate dealerships are losing business. The automobile dealers' body has approached various authorities, including Maharashtra government, Transport Commissioners of Mumbai and Delhi and Society of Indian Automobile Manufacturers (SIAM), to take action against these outlets.

These outlets acquire unregistered vehicles in bulk and then resell them to customers at discounted rates but at prices higher than those offered by original equipment manufacturers (OEMs) through authorized dealers. They do not even provide any commitment to after-sales service, FADA said in a statement. It added that this practice is impacting the authorised dealerships and also shaking customers' confidence in the brand and dealer partners.

If that's not all, these outlets indulge in evasion of GST, income tax, issuance of fake/ undervalued insurance policies, delivery of vehicles without registration/ HSRP and helmets, thus indulging in illegal practices as well as leading to revenue loss of company dealerships.

FADA has requested SIAM to raise issue with concerned OEMs to amend their sales process, ensuring that no new/unregistered vehicles are sold to unauthorised outlets.

The ongoing practice has led many legitimate two-wheeler dealerships to shut down because their businesses were rendered unviable. "We have raised the issue of unauthorized MBOs in the two-wheeler industry, which are not certified as bona fide dealers and sell unregistered vehicles without any trade certificates or after-sales services," FADA President Manish Raj Singhania told PTI.

He added that the dealership business contributes to the economic development of the country, generates employment opportunities and thus is very crucial for the economy. “Illegal practices such as this cause massive losses to the government and society and lead to significant loss of motivation among dealers."