FADA Red Flags Sales Of 2-wheelers By Unauthorized Multi-Brand Outlets

The Federation of Automobile Dealers Associations (FADA), in collaboration with the Delhi & Mumbai State Transport Department, 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 legitimate dealerships but has also shaken customers' confidence in the brand and dealer partners. 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.

Manish Raj Singhania, President of FADA, said, “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.”

FADA has reached out to Eknath Shinde, Chief Minister at 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.

Chief Minister of Maharashtra and Transport Commissioners of Mumbai and Delhi have initiated action against this illegal practice. The Delhi transport department is also taking stringent action against the outlets operating such illegal trade practices. The authorities had already issued notice on Trade Certificate cancellation to such business units.

Commenting on the stringent actions being taken by the transport department, Kailash Gahlot, Transport & Environment Minister of Delhi, said "Delhi govt will not tolerate any such illegal activity or corruption. We are committed to take action against any such instance".

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

Vivek L Bhimanser, Transport Commissioner, Maharashtra said, "All parties concerned have been given legal notice. We have cancelled the trade plate of dealers supplying vehicles to Unauthorized Multi-Brand Outlets (MBOs) & have impounded vehicles stationed at such unlawful outlets. we have impounded over 6,000 vehicles, and trade certificates of over 50 dealers have been suspended for a week as of now”.

FADA has urged all 2W dealerships to remain vigilant and report any instances of unauthorised purchases or sales to the appropriate authorities. FADA 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.