As Ford Motor Company intends to discontinue producing vehicles in India, the Federation of Automobile Dealers Associations (FADA) has asked the Centre to intervene to prevent international carmakers from shutting down their operations unilaterally, putting their dealer network in jeopardy. FADA has requested the Centre to enact legislation to safeguard dealers against foreign OEMs’ unexpected moves.
FADA wants the Franchisee Protection Act passed by the Centre as quickly as possible to protect Ford Motor dealers. The Act provides retailers with a buffer when an OEM decides to ship and shop from India. The legislation is enacted.
This rule has been long in the making, especially after three US-based automakers, including General Motors and Harley-Davidson, made similar decisions in recent years.
FADA President Vinkesh Gulati said, ‘The Government of India is demanding the implementation of the Franchisee Protection Act, since car dealers in Mexico, Brazil, Russia, China, Indonesia, Malaysia, Japan, Australia, Sweden and many countries, where this law does not exist, are not sufficiently paid as their counterparts.
Ford India is the fifth largest departure from Indian markets since 2017, behind General Motors, Man Trucks, Harley Davidson, UM Lohia, and a number of fly-by-night Electric Vehicle Players.
According to FADA, the Parliamentary Committee on Industry suggested to the Ministry of Heavy Industries that the Centre pass the Franchise Protection Act for dealers in the nation so that it is a win-win situation for both OEMs and the dealer network, as well as advantageous to customers in the long term.
FADA had already voiced its surprise at Ford Motor Company’s decision on Thursday. “The dealers also carry demo vehicles that number in the hundreds,” said Vinkesh Gulati, President of FADA. Moreover, until five months ago, the firm appointed several dealers. Such traders will suffer the worst financial loss of their lives!”
While Ford India employs 4,000 employees, dealerships employ about 40,000 people without uprooting them from their homes, ensuring that they are constantly trained and up-skilled. Ford India dealers now have around 1,000 cars on their lots, worth about $150 million, thanks to inventory finance from well-known Indian banks. Furthermore, 5 months ago, Ford India appointed several sellers. Such Dealers will suffer the worst financial loss in their lives,” he continued.
Gulati further claimed that Anurag Mehrotra, President and CEO of Ford India, had personally phoned him following the automaker’s decision to ensure that its dealers would be appropriately rewarded. Nearly 170 dealers serve Ford Motor, with 391 locations spread across the country and a total investment of Rs 2,000 crore.