Federation of Automobile Dealers Associations (FADA), the apex national body of automotive industry, has expressed concerns over the illegal practices of unauthorised multi-brand outlets (MBOs) selling two-wheelers.
FADA has 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.
This has not only impacted the legitimate dealerships but has also shaken customers' confidence in the brand and dealer partners, it said. Furthermore, these MBOs 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 said.
Maharashtra Chief Minister Eknath Shinde and Transport Commissioners of Mumbai and Delhi have initiated action against this illegal practice.
The authorities had already issued notice on Trade Certificate cancellation to such business units, the FADA said on Tuesday.
“We have raised the issue of unauthorised 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. This has caused many legitimate two-wheeler dealerships to shut down, making their businesses unviable. Such activities not only tarnish the image of dealerships but also harm brand image and values,” said Manish Raj Singhania, President, FADA.
“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,” he added.
Published 09 May 2023, 08:33 IST