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UM halts India operations

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  • UM halts India operations

    American bike maker United Motors has stopped its operations in India. This might be due to a dispute with its local joint venture partner Lohia Auto as per reports along with the slowdown in the two-wheeler industry which seems to have hit the company hard.


    The last product UM launched was the Renegade Commando Classic ₹1.89 lakh in September 2017. The production at its Kashipur plant in Uttarakhand seems to have stopped.


    Several UM motorcycle showrooms are shutting down in India, given that there are no new product launches expected any time soon leaving dealers floundering. It appears that the company has shut its operations in China due to financial crisis.


    UM built its motorcycles with 40% localized parts and 60% imported bits. While imported parts were being sourced from Indonesia, Thailand and a couple of other countries, most of the local suppliers are based in North India.


    Until April 2019, UM was retailing around 200 motorcycles a month in India. At present, most of its dealers have pulled down shutters while a few are open just for the servicing process.


    It may be noted that after April 2019, reports began coming about UM discontinuing its operations temporarily in India as none of its products had ABS. Around the same time, official reports speculated that UM was supposed to come out with a 150 cc scooter, called the ‘Chill 150 ABS’ to give a boost to the brand. Given the current UM state, that idea seems to be shelved.

  • #2
    Re: UM halts India operations

    Thread approved.

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    • #3
      Re: UM halts India operations

      I am happy they failed. 'UM Motors' is just an 'American' company which does not have the rights to sell in the USA. They sell motorcycles which are manufactured in China by a company which is famous for selling it's product to other company who slap a badge on them. Feel sad for Lohia though, but they should've done their homework before doing business with them.

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      • #4
        Re: UM halts India operations

        UM tried making money with the Indian-liking-for-imported-stuff feelings. They failed miserably. And I am sure they did zero ground work. The just closed their eyes, prayed to god and dropped their products in the market with senseless price tag. More than UM or Lohia, I feel bad for people who bought their bikes. They are stranded now. And the resale value is shocking.

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        • #5
          Re: UM halts India operations

          Feeling bad for those who had put their faith on a relatively unknown entity. They will be the ones who will be hit the most! The after sales service was already nothing to talk about - now what about the spares and services?
          A bike on the road is worth two in the shed.

          Weekend Rides Around Kolkata
          My Ride To Sunderbans -
          Hemnagar & Samsernagar
          Saagar Kinare - Bakkhali Calling

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          • #6
            Re: UM halts India operations

            Originally posted by krishna77 View Post
            Feeling bad for those who had put their faith on a relatively unknown entity. They will be the ones who will be hit the most! The after sales service was already nothing to talk about - now what about the spares and services?
            Had the same question about spares & services. I asked a friend who has a UM. He spoke with his dealer and the dealer said that some dealers are ready to provide support for some time but most of the dealers are jumping the sailing ship leaving owners stranded.

            And I don't think UM has a very complicated engines. My guess is that it can be maintained at any garage but spares will be an issue.

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            • #7
              Re: UM halts India operations

              Hello !

              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. !
              Last edited by tirebuster; 10-24-2019, 02:25 AM.

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              • #8
                Re: UM halts India operations

                My local mechanic has one um motorcycle lying with him , he told bikes has problems and parts are nowhere to be found ,um had service and showroom closed long back. But I do see one or two um rider , felt bad really , as a cruiser or retro style bike lover , I wanted more options in lower segments . But seeing above post is very bad such scam happened .

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