NEW DELHI — India’s apex automobile dealers’ body, the Federation of Automobile Dealers Associations, on Aug. 24 urged Heavy Industry Minister Mahendra Nath Pandey to frame exit rules for Auto Manufacturers.

Federation of Automobile Dealers Associations cited the example to exit the world’s top auto manufacturing company General Motors from India.

The representatives made the observation on the sidelines of FADA’s 3rd Auto Retail Conclave on the theme Thriving Through Disruption.

“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,” said Vikesh Gulati, President, Federation of Automobile Dealers Associations.

The association wants the heavy ministry to set up a process like western countries have regulations to protect the right of their consumers and dealers.

“General Motors is the latest example, which is one of the top two manufacturers in the world of cars, but in India, they exited overnight,” Gulati.

“So there are some lakhs of GM cars, and their customer can’t have the service. We raised this problem to the Ministry of Transport, Prime Minister, and Heavy Industry Ministry as well. We were able to put some pressure on such companies where they allowed the dealers to at least service another two years to the customer. So that was a small victory for us, which set up a plan for the future.”

Gulati said that this similar thing has happened with UM Lohia, MAN Truck and Bus, Harley Davidson, whereas Harley then supported and has come back again to hero, but there was a blank for two years when the customers were not happy because of that.

“If the company exits overnight from India and its services are not available, it becomes scrap,” he said.

“So we urge the minister to protect the right of the consumers, compensate the dealer who has invested all the money in the company’s face and commit to the future. We are again meeting the minister next month with a plan we are expecting something to happen in this.”

Federation of Automobile Dealers Associations had recently released the vehicle retail data for July.

“Private vehicles witness high demand, especially with the buzz around new launches and compact SUV segments,” the report said.

“The waiting period due to supply-side constraints have been persisting for quite a few months and is now becoming a deep routed issue for OEMs. Though the 2-wheeler segment continues to see positive demand year-on-year, the rate of recovery remains sluggish as customers at the bottom of the pyramid suffer from poor disposable income and rural markets where covid cases were high during the second wave.”

(With inputs from ANI)

Edited by Saptak Datta and Praveen Pramod Tewari

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