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.
As per the association, these MBOs are acquiring unregistered vehicles in bulk from dealers and reselling them to customers at discounted rates, higher than the prices offered by OEMs through authorised dealers, without any commitment to after-sales service.
This has impacted legitimate dealerships and shaken customers' confidence in the brand and dealer partners. Furthermore, these MBOs indulge in the evasion of GST, and income tax, issuance of fake/ undervalued insurance policies, and delivery of vehicles without registration/ HSRP and helmets, resulting in revenue loss on various fronts.
FADA has reached out to Eknath Shinde, Chief Minister, Government of Maharashtra, Vinod Aggarwal, President, SIAM, 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.
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Manish Raj Singhania, President, FADA said, “We have raised the issue of unauthorised multi-brand outlets 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.”
Stringent Action Taken
The Chief Minister of Maharashtra and the 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.
Kailash Gahlot, Minister, Transport & Environment, Government of Delhi, said, “Delhi Government will not tolerate any such illegal activity or corruption. We are committed to take action against any such instance.”
As per Ashish Kundra, Principal Secretary & Transport Commissioner, Transport Department, NCT Delhi, FADA has been working closely with the dealer fraternity and the Government to maintain a healthy and lawful business environment in the region.
He 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 unauthorised 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. It 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.