Promised upcoming UM Motorcycles may get delayed or may not come at all – the joint venture with Lohia is turning out to be a big mess…
After the initial hype, UM Motorcycles, which operates under a joint venture in India – UM Lohia Two Wheelers, never got going. Since April this year (when the ABS ruling got enforced), the company has not shipped a single motorcycle out of its plant – which means there has been no production for at least six-seven months.
A new report at Economic Times reveals Lohia Group’s point of view on this. Ayush Lohia -the CEO of Lohia Auto, confirmed that the plant in not functional and blamed UM for not being supportive. He said that it is not possible for them to go operational in the near future and it can not run the JV one-sidedly!
It’s a joint venture, we can’t make the decision alone if a foreign partner is not interested. There are a lot of terms and conditions in the agreement,
Technical issues are cited to be one of the issues which has caused disputes. The report claims that Commando cruiser was recalled frequently because of a faulty gear plate and defective fuel pump but it was never rectified!
A dealer claimed that most (or all) of the employees have left the company and there is no production since long. Most of the dealers have closed shops and only a few remain with the company. The ones left are surviving by servicing the older motorcycles as there is nothing new to sell! Many dealers are planning to sue the company for compensation.
UM showcased many interesting motorcycles at the 2018 Auto Expo and there were a lot of models in pipeline, including a 200cc Adventure motorcycle (more details here). However, this appears to be a big dispute between the partners which may or may not get resolved!
UM Motorcycles of America and Lohia Auto from India became partners in 2014 and set up a manufacturing base in Uttarakhand with an annual production capacity of 100,000 units. Things do not appear to be moving in a positive direction and generally JVs have not survived for long with such kind of disputes.
Source – Economic Times