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Last Updated : Aug 08, 2019 04:37 PM IST | Source: Moneycontrol.com

UM Motorcycles to restart sales this year, company undergoes restructuring

The joint venture (JV) of UM Motorcycles and Lohia Auto is presently undergoing a restructuring exercise due to which no sales of UM products have happened

Swaraj Baggonkar @swarajsb

Sales of American bike brand UM Motorcycles will restart by Diwali this year allaying fears of yet another exit by an automotive brand from India.

The joint venture (JV) of UM Motorcycles and Lohia Auto is currently undergoing a restructuring exercise due to which no sales of UM products have happened since April this year, as per data published with the apex lobby body of automobile players.

Ayush Lohia, CEO, Lohia Auto said, “The JV company with UM Motorcycles is under restructuring. There have been rumours in the media about a split (between the partners) but nothing of that sort is happening. The company and the organisation are under restructuring. We will be sharing a report soon which will be an official statement.”

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As per data shared by the Society of Indian Automobile Manufacturers (SIAM), UM Motorcycles sold 2,856 units last year, a drop of 62 percent compared to 2017-18. Several of its dealers have shut shop in a number of cities, unable to absorb the mounting losses. The company’s website has been nonfunctional.

“As sales are not happening and it’s a challenge for the dealers to sustain themselves. We will clear the air on the same and we will be launching products soon. We are contemplating that by Diwali we should restart sales”, added Lohia.

UM Motorcycles joined hands with Noida-based Lohia Auto in 2014 to form UM Lohia Two Wheelers. The JV set up a manufacturing base in Uttarakhand with a capacity to make 100,000 units a year.

The first of these products – commuter cruisers - were launched in early 2016 followed by more cruisers in the same year. The motorcycles were to explore a white space in the bike segment as no manufacturer had cruisers with 250cc engine at the price starting at Rs 1.5 lakh.

The expanded range comprised of Renegade Commando Classic, Renegade Commando Mojave, Renegade Commando and Renegade Sports S priced between Rs 1.59 lakh and Rs 1.95 lakh (ex-showroom). The JV set up dealerships which during its peak hit more than 80 in Tier-I and Tier-II cities.

In recent years, several premier auto brands and companies have made a quiet exit from the country. These are AMW, Ssangyong Motor Company, Eicher Polaris, Scania, Premier, MAN, Fiat, Mahindra Two Wheelers and General Motors have exited India.

Heightened competitiveness, change in company strategy, high debt burden and poor product, brand recall and inability to invest for upgrading to new emission norms are some of the reasons why these brands failed in India.

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First Published on Aug 8, 2019 04:37 pm
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