Automobile dealers' body demands exit regulations for foreign auto manufacturers

FADA President Vikesh Gulati has said that when GM exited India overnight, lakhs of customers here were left without any assurance of service.He added
File photo used for representational purpose only (REUTERS)
File photo used for representational purpose only

The Federation of Automobile Dealers Associations (FADA) has urged Heavy Industry Minister Mahendra Nath Pandey to frame exit regulations for foreign auto manufacturers. The automobile dealer's body cited the example of US auto maker General Motors' (GM) overnight exit from India.

Explaining that when a foreign company exits the country suddenly, its customers are left without any service and thus their vehicles become equal to scrap, FADA urged the minister to come with laws to protect the right of the consumers as well as compensation for dealers.

(Also read | Are dealer workshops better equipped to check vehicle fitness?)

FADA President Vikesh Gulati told ANI that he wants the minister to set up a process for exit of auto makers from the country just like western countries have set up regulations to protect the right of their customers and 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.

Elaborating on General Motors' exit from India, Gulati said that US company, one of the top two manufacturers of cars in the world, exited from India overnight. This left lakhs of GM customers in the country without any assurance of service. Post this, FADA raised the concern with the Ministry of Transport, Heavy Industry Ministry as well as the Prime Minister. "We were able to put some pressure on such companies where they allowed the dealers to at least (provide) service (for) another two years to the customer. So that was a small victory for us, which set up a plan for the future," Gulati said.

(Also read | Passenger vehicle retail sales surge 63%, reach pre-Covid level: FADA)

He added that similar issues had happened when UM Lohia, MAN Truck and Bus, and Harley Davidson exited the Indian market. Though Harley extended its support with the help of Hero MotoCorp, “there was a blank for two years", Gulati explained. FADA will again meet the minister next month to discuss the concerns.

(with inputs from ANI)

First Published Date: 25 Aug 2021, 10:50 AM IST

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