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  • 1 Post By tirebuster

Thread: General Note: China Companies using brand names created in First World countries for dumping.

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    Default General Note: China Companies using brand names created in First World countries for dumping.

    Hi all xBHP forummers.

    This is a general note to all present here. A lot of mid-sized Chinese motorcycle companies are out to capture the two wheeler and four wheeler markets in countries such as India, SE Asian countries and Latin American countries.

    They have been registering brand names in countries such as the US, UK and other advanced countries and passing their products off as "from country XYZ" where they register a brand name. While larger Chinese manufacturers have mostly been acquiring foreign brand names, it is usually the mid-sized manufacturers have been resorting to this tactic. (exceptions do exist - even some large manufacturers do this with their less desirable, cheaper product lines that they cannot sell in advanced countries). The mid sized manufacturers usually acquire the components (including the engine, the frame and body panels) from various different manufacturers and put them together sort of like Lego blocks to create "unique" looking designs. personally, I am not a fan of this approach to building motorcycles.

    This is just a general note to users to be aware of this type of business model. So the next time you see an American Manufacturer pop up out of the thin, please do some basic research before blindly buying what you believe is an American product.

    United Motors Lohia, and more recently, Cleveland Cyclewerks -- both of these companies are dubious and are clearly violating multiple Federal Trade Commission (USA) laws by claiming American Heritage. They are simply getting away with this because

    (1) They don't sell anything in the US (UM).
    OR
    (2) Only make in these false claims outside the US. (Cleveland Cyclewerks has sold about half a dozen motorcycles in the US, and they clearly declare here that they are Taiwanese/Chinese - they do not mention the word USA/American).

    Please be aware of this before buying.
    kb100 likes this.

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    Super Moderator sunilg's Avatar
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    Default Re: General Note: China Companies using brand names created in First World countries for dumping.

    Interesting piece of information there, but it would be great if you could show some supporting material/literature to support this!

    Topic approved.
    (Been There Done That) x 3.25

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    Default Re: General Note: China Companies using brand names created in First World countries for dumping.

    Wrong section?
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    Default Re: General Note: China Companies using brand names created in First World countries for dumping.

    Quote Originally Posted by MotoBlizzard View Post
    Wrong section?
    Corrected. Thanks
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    Default Re: General Note: China Companies using brand names created in First World countries for dumping.

    Even I've heard that UM is not American. Couldn't find any sales reports for them in USA.

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    ER Doctor MotoBlizzard's Avatar
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    Default Re: General Note: China Companies using brand names created in First World countries for dumping.

    Quote Originally Posted by Vicky_New_Guy View Post
    Even I've heard that UM is not American. Couldn't find any sales reports for them in USA.
    Its South American, manufactured in China and Taiwan, so you get the general idea about why it doesnt look American (atleast IMO)

    It has a Joint venture with Lohia Auto in India along with manufacturing plant here.
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    Default Re: General Note: China Companies using brand names created in First World countries for dumping.

    Some people here would know me already as "B Rakesh" the guy that wrote an answer on Quora way back in 2017 exposing the false marketing claims made by UM Lohia. "Are Bikes by UM Good?"

    It makes my heart ache seeing all the people who got caught up in this mess. The Villegas brothers are cunning businessmen. I have been able to unearth new information about this mysterious company since July 2017, when I wrote that answer discouraging people from buying UM products. I had warned sufficiently and shared every bit of information I could find online about UM. (It was hard to come by - there wasn't a lot available online)

    Background:
    The Chinese have been raging to sell their automobiles in the international markets where the Japanese dominate, and the Indians are gaining momentum in recent years and earning a great amount of trust and goodwill with quality products and service. China likes to dominate every sector in international trade and in the automobile sector, although they lead by volume, the Chinese motorcycle manufacturers haven't quite cracked some markets like India. They aren't very happy about it. They have been trying hard to push their products into India disguised as "American". UM is basically a marketing mechanism to sell Chinese vehicles in Latin America and eventually worldwide. The parent company, UM Global is a Chinese consortium of mid sized manufacturers from the ChongQing auto industrial area looking to push products into countries in Latin America(primarily), Eastern Europe, Africa, South Asia and and South East Asia. The parent, UM Global operates out of China and has subsidiaries set up for distribution in many regions - including Colombia (South America) which is their primary operation outside of China. They have small companies set up in the Philippines, Eastern Europe, and even in the UK to carry out the distribution. Their Indian wing happened to be a partnership with Lohia - I now learn that UM did not fulfill their part of the financial obligations that they signed into agreement and apparently Lohia is now stuck with the responsibility of paying back the distributors (Showroom owners).

    What did they do in the US:
    They sold Jincheng Motorcycles in the US. (Registered as "Jincheng USA"). Then owing to poor sales, they got an English sounding name and registered a new company, "United Motors of America LLC". Then owing to legal issues(?) they registered again as "UM Motors of America LLC". The important thing to note here is that all of these registrations are of the category "Florida Foreign LLC". The State of Florida allows Foreign (NON-US) companies to do business here as a "Foreign LLC". In their marketing material at the time, UM clearly position themselves as a "Powersports Distributor" distributing bikes of various makes. There was no question of pretending to be American (US) originated co. with an incriminating "foreign llc" registration because that's a crime and the FTC is very strict about such claims. So they just did not make such claims while in the US (1998 - 2010 under multiple names). Their sales were mediocre until they hit gold in 2005 - a deal with Hyosung to rebadge and sell Hyosung bikes with a UM branding. This is when they made a lot of money because now, unlike the Chinese products they distributed before, now they had a quality product that they could put their name on. But the relationship with Hyosung did not last very long - because UM violated the terms of agreement with Hyosung (1) Not making payments to Hyosing for the products they got and (2) Lying to customers about warranty - UM Sold their rebadged Hyosungs with a 3 year warranty to attract more customers, and oh how the money flowed ! (Hyosung themselves were only offering a realistic 1 year warranty !!!)

    Hyosung eventually lost patience and pulled the plug. Within months, UM Closed their US Distribution operations and quietly left the US. A lot of customers were left with nowhere to go for parts. Three years later, in 2012, they announced plans to go to India, which was by then poised to become the biggest motorcycle market in the world. The Villegas brothers smelled blood.

    UM in India:
    They found a gullible Indian Partner (Lohia), and started making tall claims "American Manufacturer" - both of these words were a total sham. They were neither American (Registered as a "Foreign LLC") and nor a Manufacturer -- Just a distributor. The Initial Marketing Hype that they managed to generate shocked and dismayed me. Even the media and auto journalists in India did not do the most basic research and I was alarmed at the quality of journalism! So, I wrote that Quora Post alerting people about this company ! I may have discouraged thousands from buying UM products. I provided as many links to the facts that I stated in that article as I possibly could find. Interestingly enough, they only make the "USA Originated" claim in countries where they think the audience is gullible, usually the third world countries. Their UK distributor, Lexmoto, states that UM is Chinese in the UK - where the laws governing "Country of Origin Claims" are strict unlike India. You wont see that infamous "USA Originated" branding on their UK website ! I am not even sure if we have laws governing such claims in India.


    My Take:
    (1) If they had a quality product (like Hyosung), they would have survived in India despite the false "US Origin" claims. But what they had was a basic product made by an obscure Chinese Manufacturer with no focus on quality. Their only focus is to manufacture cheaply, quickly, sell quickly and make money. Quality is basic at best. They turned out to be no match (as expected, obviously) for the expectations of the locals in India who have been pampered by the likes of TVS (Multiple Deming Prize winner for Quality Control), Bajaj (World class R&D and Quality Control teams) who are now kicking arse around the world and challenging even the mighty Japanese manufacturers in the lower displacement segment.

    (2) Today, Life just came a full circle for the Villegas brothers -- they shut down Quietly in India and escaped with the loot-. Exactly the way they did in the US, ten years ago, exactly the way they cheated thousands of American consumers. But the problem with India though, is that we get fooled by people who have already committed a crime and already have a poor track record. Simply because we are too lazy to go do some basic research on this beautiful thing called the internet. Very sad indeed. !

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