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Automobile dealers' body the Federation of Automobile Dealers Associations (FADA) has raised the issue of unauthorised multi-brand outlets (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. This has caused many legitimate two-wheeler dealerships to shut down, making their businesses unviable.

FADA has approached various authorities to take strict action against the practice. It said the 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. Furthermore, it stated that 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.

The industry body 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.