Dealers say General Motors is giving inadequate compensation for the discounts on the cars numbering around 2,700
General Motors dealers in India are mulling the option to sue the American auto giant in its home soil over the compensation against discounts the company is currently offering on its cars in order to clear out the inventory. Presently, General Motors has around 1,900 Chevrolet cars in the dealerships across the country and 800 in the stock with the company itself.
In an attempt to clear out these 2,700 cars before the brand exits from the domestic market by the end of this year, GM owned Chevrolet is offering huge discounts across its models. The discounts go up to 30%, but the dealers claim that GM is offering a compensation of around 12% of their investments leaving the showroom owners in front of huge loss.
For instance, a dealer owning couple of showrooms made investment of around Rs. 6 crore for setting up the showroom. But now, the US automaker is offering him only Rs. 75 lakh as compensation. Now unhappy with the compensation dealers in the country are mulling three options. Some are looking at filing civil suits against GM, while some are mulling criminal cases. But most interestingly, dealers are also exploring the option to file a lawsuit against the brand in US.
GM is already in talks with its dealers in India regarding the stoppage of sales in the local market and other issues like after sales service for its cars and compensation on discount. However, the company didn’t reveal anything in public regarding the compensation issue.
On 18th may this year, the company announced its exit from the domestic market, as the Detroit-based automaker has been suffering from huge losses for quite some time. In the last financial year, it sold only 25,823 units in the country. But, the company will continue its production for overseas markets in its Talegaon plant in Maharashtra.
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