Forging an alliance is hard. We get it. Keeping it alive, maintaining finances, leaving aside egos and fruitful conversations are the even harder part. Something like this happened with an alliance that started in 2016 – UM-Lohia. UM entered the Indian market with a bang at the Auto Expo then and thereon. The products were launched thereafter. These cruisers were initially met with a good response. However, later on, customers said that the quality was an issue and the motorcycles were more Chinese than American. UM still went ahead and launched the slightly more expensive Mojave cruiser. There were plans and UM-Lohia intended to launch an on-off road motorcycle in the 200cc space. This is where news of cracks developing in the wall came forth. UM stopped sending its motorcycles to dealerships and even existing customers were left in the lurch due to the lack of spare parts. We have now got an exclusive interaction with Ayush Lohia, the CEO of Lohia Auto. Scroll down to hear it right from the horse’s mouth.
According to Ayush, things went down pretty well initially. UM had three entities – UM Global, UM International and UM India. Out of these, Lohia Auto was associated only with the latter. UM India used to interact with the other two and procured the motorcycles for sale. Somewhere down the line after a year, Ayush says, UM dropped down in terms of supplying vehicles or even updating the vehicles according to technology required. UM was further in a financial crisis and were also unable to meet the requirements of the Indian customers. UM’s forte, according to Ayush, was technology and there was no way Lohia Auto could step into that territory staying in the alliance. Lohia also didn’t have access to UM’s technology, as part of the deal.
This 50:50 agreement between UM and Lohia Auto had the latter handling marketing, sales as well as service. Lohia Auto was responsible for manufacturing the vehicles on UM International’s mandate at Kashipur, UP. UM in the meanwhile handled the homologation, technical bits, quality development and vendor management. Lohia Auto was informed from UM that the upcoming regulations (ABS and BS-VI) will be met in due course of time. Unfortunately, none of this bore frutition.
On the topic of existing customers who feel cheated, Ayush says that they are trying their best to help them. Since UM no longer is present in our country and the vendor development was handled by them, there is precious little that Lohia can do about it. Imported components were sourced by UM and hence Lohia doesn’t have access to them. Ayush says that they want to help the dealer principals but are unsure how. UM has discontinued communications with Lohia Auto too. While the joint venture is yet to be officially dissolved, Ayush sighs, it will be over soon.
On being asked on the learnings from this JV and if they will be okay in getting into another, Ayush mentions that they look at this in a positive fashion. There were lots of learnings and a joint venture in the future is definitely something which Lohia Auto is gung-ho about. It will help Lohia Auto in the future for sure.
Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.