The automobile dealers’ body has urged the Ministry of Heavy Industries to frame a set of exit rules for foreign auto manufacturers operating in India
Federation of Automobile Dealers Associations (FADA) wants exit rules for auto manufacturers to be framed, and has urged Heavy Industry Minister Dr. Mahendra Nath Pandey for the same. The dealer’s association has cited the exit of auto giant General Motors from the Indian market as the reason, as per an ANI report.
At FADA’s 3rd Auto Retail Conclave, themed on ‘Thriving Through Disruption’, FADA President Vikesh Gulati stated that GM is one of the largest automobile manufacturers in the world, but it failed to capture the Indian market, following which it decided to call it quits here. The exit was extremely quick and would’ve resulted in huge problems for existing GM car owners, who are million in numbers.
The association had raised this problem to the Ministry of Transport, the Heavy Industry Ministry, and the Prime Minister. FADA reportedly put pressure on such companies, and thus dealers were allowed to offer services to customers for another two years. FADA also noted that these problems had also happened with UM Lohia, MAN Truck and Bus, and Harley-Davidson.
With Harley-Davidson, the partnership with Hero MotoCorp has now brought stability, but previously, dealerships and customers were unhappy with the manufacturer for around two years due to a lack of surety. If any manufacturer decides to quit the Indian market as exits overnight, all existing customers and dealers would be left stranded, which is a major problem for the auto market as a whole.
Vikesh Gulati stated that there are laws in other countries to protect the rights of consumers and auto dealers. “The United States has franchise protection act, the United Kingdom has its own code of conduct, Australia has its own auto dealer code, but in India, we have no such code or regulation, there is only one company exit clause, that’s it,” he said.
FADA will hold another meeting with the Heavy Industry Minister next month, and the former is expecting development in this matter. If proper exit regulations are indeed set up, it would help ease the transition for the dealers of the exiting manufacturer, and customers will be able to get parts, maintenance, and services for a while afterwards.