US auto major Ford Motor declared that it will cease its vehicle production at its two plants in India and plans to sell only imported vehicles from now on as part of their restructuring strategy plan. This decision to shut both manufacturing plants will impact 4000 employees and about 150 dealers principals who operate 300 outlets.
To monitor the payment structure that is being worked out by Ford India for its dealers across the country, the Federation of Automobile Dealers Association [FADA] has asked the government to set up a task force and look into the matter.
FADA speaks for over 15000 automobile dealers who have 26,500 dealerships within the country. Expressing that the automotive dealers have lost round about INR. 2,485 crore since 2017 because of the exit of OEMs from the country. FADA President Vinkesh Gulati urged the government to enjoin Ford India to keep the industry body informed about the developments in the compensation structure for the dealerships. Additionally, they have sought the formation of a task force that takes daily briefs from Ford India. And monitor the compensation plan for automobile dealers and dealership employees. Stated Vinkesh Gulati, in a letter written to the Heavy Industries Minister Shri Mahendra Nath Pandey.
Besides, Vinkesh Gulati requested the ministry to note that Ford India ensures dealers from various consumer and civil cases. Both under trial for determination of settlement and against any future cases that may arise out of the automaker’s restructuring statement.
Furthermore, Ford India is compelling its dealers to sign an NDA before any compensation deal is worked out. Numerous Ford dealers have directly or indirectly requested FADA to take up the matter for a cordial resolution. Gulati further stated that coercive efforts on Ford’s part to get their channel partners to sign an NDA with the strain of unco-operative tight timelines. This further adds economic pressure which is not the correct method and in turn affects the dealer interests.
The association has requested the government to formally start a dialogue on the Automobile Dealers’ Protection Act. Furthermore, they have requested the Ministry to safeguard the auto dealers’ rights. By the means of legislation as advised by the Parliamentary Committee on Commerce and Industry. And get in a sight of balance for the industry as many international players are entering the Indian auto market. This will ensure the interest of the dealers’ and customers. Moreover secure the interests of people associated by the dealerships in India.