FADA Raises Concerns Over Sales Of Two Wheelers By Multi-Brand Outlets

The Federation of Automobile Dealers Associations (FADA), in collaboration with the Delhi and Mumbai State Transport Departments, expressed concerns over the illegal practices of unauthorised multi-brand outlets (MBOs) selling two-wheelers. FADA reported that these MBOs are acquiring unregistered vehicles in bulk from dealers and reselling them to customers at discounted rates, higher than the prices offered by original equipment manufacturers (OEMs) through authorised dealers, without any commitment to after-sales service.

Kailash Gahlot, Transport and Environment Minister of Delhi said, "The Delhi government will not tolerate any such illegal activity or corruption. We are committed to taking action against any such instance.”

FADA says that this has not only impacted legitimate dealerships but has also shaken customers' confidence in the brand and dealer partners. Furthermore, FADA claims these MBOs indulge in evasion of GST and income tax, issuance of fake or undervalued insurance policies, and delivery of vehicles without registration, HSRP, or helmets, resulting in revenue loss on various fronts.

Ashish Kundra, Principal Secretary cum Transport Commissioner, Transport Department of NCT Delhi said, “Legal notice has been issued to all the involved parties, and their respective trade certificates have been put under the scanner.”

FADA reached out to Eknath Shinde, Chief Minister, Government of Maharashtra, Vinod Aggarwal, SIAM President, and the Transport Commissioners of Mumbai and Delhi, urging them to take stringent action against these MBOs and ensure their compliance with industry standards and regulations. The Delhi Transport Department is also taking stringent action against the outlets operating such illegal trade practices. The authorities had already issued notices of trade certificate cancellation to such business units.

Manish Raj Singhania, President, FADA said, “We have raised the issue of unauthorized multi-brand outlets (MBOs) in the 2-wheeler industry, which are not certified as bona fide dealers and sell unregistered vehicles without any trade certificates or after-sales services.”

FADA has urged all two-wheeler dealerships to remain vigilant and report any instances of unauthorized purchases or sales to the appropriate authorities. FADA has also written to SIAM, the association of OEMs, requesting that they raise the issue with concerned OEMs to amend their sales process, ensuring no supply of new/unregistered vehicles to unauthorized outlets.