FADA Red Flags: 2-Wheeler Sales By Unauthorized Multi-Brand Outlets

All 2W dealerships have been urged by FADA to be watchful and alert authorities to any instances of unauthorized purchases or sales.

The illegal practices of unlicensed multi-brand outlets (MBOs) selling two-wheelers have drawn the attention of the Federation of Automobile Dealers Associations (FADA) and the Delhi and Mumbai State Transport Department.

According to FADA, these MBOs buy unregistered cars in bulk from dealers and then resell them to customers at prices that are higher than those set by original equipment manufacturers (OEMs) through authorized dealers, all without making any commitment to provide any kind of after-sales support.

Customers’ trust in the brand and dealer partners has been damaged as a result, which affects more than just legitimate dealerships. These MBOs also engage in tax fraud, including the evasion of GST and income tax, the issuance of fake or undervalued insurance policies, the delivery of vehicles without registration or HSRP, and the failure to include helmets in the purchase price.

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

Eknath Shinde, the Chief Minister of Maharashtra, Vinod Aggarwal, the President of SIAM, and the Transport Commissioners of Mumbai and Delhi have all been contacted by FADA, who has pleaded with them to take strict action against these MBOs and ensure that they abide by all applicable standards and laws.

The Maharashtra Chief Minister, as well as the transport commissioners of Mumbai and Delhi, have taken action to stop this unlawful practice. The transport department in Delhi is also taking tough measures against the businesses engaging in such unethical business practices. Such business units had already received notice from the authorities that their trade certificates would be cancelled.

The Delhi government will not tolerate any such illegal activity or corruption, said Kailash Gahlot, Minister of Transport & Environment, in response to the strict measures being taken by the transport department. We promise to respond to any such incident with action.

Ashish Kundra, Principal Secretary and Being Transport Commissioner for the National Capital Territory of Delhi, stated: “A legal notice has been issued to all the involved parties, and their respective trade certificates have been put under the scanner.”

“All parties concerned have been given legal notice,” said Vivek L. Bhimanser, Maharashtra’s transport commissioner. Vehicles stationed at such illegal outlets have been impounded, and we have cancelled the trade plates of dealers who supply them with vehicles. The trade certificates of more than 50 dealers have had their trade privileges suspended for a week as a result of our impounding of over 6,000 vehicles.

All 2W dealerships have been urged by FADA to exercise caution and alert the proper authorities in the event of any unauthorized purchases or sales. In a separate letter, FADA asked SIAM, the association of OEMs, to bring up the matter with the relevant OEMs and urge them to change their sales procedures to ensure that no new or unregistered vehicles are supplied to unlicensed outlets.

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