FADA calls for government support on compensation structure for Ford, Auto News, ET Auto dealers

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Earlier this month, U.S. auto major Ford Motor Co announced it would halt vehicle production at its two factories nationwide and only sell imported vehicles as part of a restructuring exercise.

New Delhi:

The body of car dealerships FADA urged the government to form a task force to monitor the compensation structure being developed by Ford India for its dealer partners across the country. In a letter to Heavy Industries Minister Mahendra Nath Pandey, FADA Chairman Vinkesh Gulati also called on the government to ask Ford India to keep the industry body updated on the dealership compensation structure. .

“We humbly request the intervention of your ministry… Create a task force that takes daily updates from Ford India to monitor the compensation plan for car dealers and dealership employees,” Gulati said in the letter. Also, ask Ford India to keep FADA up to date on dealer issues and the compensation structure, he noted.

In addition, Gulati also called on the ministry to ensure that Ford India compensates dealers for various civil and consumer cases, both pending and against any future cases that may arise directly or indirectly from the announcement of the manufacturer’s restructuring. automobile.

Ford India requires its dealers to first sign a Non-Disclosure Agreement (NDA) no later than September 14, 2021, before a compensation plan is worked out. Many Ford dealers have directly or indirectly applied to FADA to take up the matter for an amicable resolution., “he noted.

Such coercive efforts by Ford to get their distribution partners to sign an NDA with the imposition of unreasonably tight deadlines, under economic duress are not the right approach and have a negative impact on the interests of dealers, a he added.

FADA, which represents more than 15,000 car dealers and 26,500 dealers across the country, said car dealers have lost around 2,485 crore rupees since 2017 due to the exit of five OEMs in the country.

Almost 64,000 people lost their jobs in dealerships due to the exit of companies like General Motors, Harley-Davidson, Man Trucks, UM & Lohia and now Ford India, he added. Gulati also urged the government to officially initiate a discussion on the Automobile Dealers Protection Act.

“I would ask your ministry to work on protecting the rights of car dealers, possibly through legislation as suggested by the Parliamentary Committee on Trade and Industry … and to create a sense of balance in the industry as a growing number of international players enter the Indian automotive market. This will not only protect the interests of dealers and customers in India, but will also protect the interests of those employed by dealers, ”noted Gulati.

Earlier this month, U.S. auto major Ford Motor Co announced it would halt vehicle production at its two factories nationwide and only sell imported vehicles as part of a restructuring exercise.

The company, which has invested around $ 2.5 billion in its factories in Chennai (Tamil Nadu) and Sanand (Gujarat), has accumulated operating losses of around $ 2 billion in India over the past ten years. last years. Its decision will affect more than 4,000 employees and approximately 150 major dealerships that operate more than 300 outlets.

With the closure of vehicle manufacturing operations, the automaker will stop selling vehicles such as the EcoSport, Figo, Endeavor, Freestyle and Aspire, which are produced from these factories.

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