Multi-brand two-wheeler auto dealers have come under fire from dealers’ associations alleging that they were engaged in several malpractices.
The multi-brand outlets (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, the Federation of Automobile Dealers Associations (FADA) said in a statement.
The outlets indulge in evasion of GST, income tax, issuance of fake/ undervalued insurance policies, delivery of vehicles without registration/ HSRP and helmets, resulting in revenue loss on various fronts, FADA stated.
“We have raised the issue of unauthorised 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 stated.
He said it has approached various authorities to take strict action against the practice. This has not only impacted the legitimate dealerships but has also shaken customers’ confidence in the brand and dealer partners. This has caused many legitimate two-wheeler dealerships to shut down, making their businesses unviable, he added.
“The dealership business is dynamic and contributes consistently to the economic development of the nation, generating significant employment opportunities in the sector. Illegal practices such as this cause massive losses to the government and society and lead to significant loss of motivation among dealers, leading to greater loss of employment opportunities,” Singhania said.
The industry body has also written to SIAM, the association of OEMs, requesting them to raise the issue with concerned OEMs to amend their sales process, ensuring no supply of new/unregistered vehicles to unauthorised outlets, FADA said.
FADA has also reached out to the Maharashtra government and the Transport Commissioners of Mumbai and Delhi, urging them to take stringent action against these MBOs.