The rise of unauthorized multi-brand outlets (MBOs) is a cause for concern, as it raises several issues related to consumer protection, taxation, and compliance with legal requirements.
One of the main concerns is the lack of after-sales services these outlets provide. When customers purchase a new 2-wheeler, they expect to receive support from the manufacturer or the authorized dealer in case of any issues with the vehicle.
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However, MBOs may need more technical expertise or resources to provide such services, which could result in poor customer experience and potential safety hazards.
Tax evasion
Another issue is related to tax evasion. If MBOs are acquiring unregistered 2-wheelers from dealers in bulk, they may avoid paying the applicable taxes, such as GST or state-specific taxes. This not only results in a loss of revenue for the government but also gives an unfair advantage to unauthorized outlets over authorized dealers who comply with the tax regulations.
The alleged issuance of fake or undervalued insurance policies and delivery of vehicles without HSRP and helmets is also a serious concern, as it risks customers’ safety. The law mandates new vehicles must have a valid insurance policy, HSRP, and a helmet, and any violation of these requirements should be penalized.
FADA
The Federation of Automobile Dealers Associations (FADA) is concerned about the impact of multi-brand outlets (MBOs) on authorized dealerships in the automotive industry. FADA believes MBOs are causing a loss of business for authorized dealerships and affecting customer confidence in the brand and its dealer partners.
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FADA has raised this issue with concerned authorities and contacted the Maharashtra government and Transport Commissioners of Mumbai and Delhi to take action against MBOs. It remains to be seen what steps will be taken to address these concerns, but all stakeholders in the automotive industry need to work together to ensure a level playing field and a fair marketplace for all.
Conclusion
Overall, it is essential to address the concerns raised by FADA and take appropriate measures to regulate the operation of MBOs, protect consumer interests, and ensure compliance with legal requirements. This could involve enforcing stricter regulations, conducting regular inspections and audits, and educating consumers about the risks of purchasing vehicles from unauthorized outlets.
Source : ET Auto
