FADA seeks legislative safeguards to prevent auto OEMs exiting India abruptly

The Indian auto industry has witnessed shocking and abrupt exit of multiple global automakers over the last decade. This exits have caused severe distress among the automobile dealers who were associated with the concerned OEMs. Also, the customers who purchased vehicles of these brands have faced uncertainty regarding the after-sales servicing and maintenance of their vehicles. Overall, these exits caused major disruptions in the industry. Keeping that in view, Federation of Automobile Dealers Associations (FADA) has sought legislative safeguards to prevent the auto OEMs from exiting the country abruptly. FADA has said that such a legislation would safeguard the interest of dealers and employees working at those retail outlets.

Speaking at the 6th Auto Retail Conclave organised by the automobile dealers' body, newly appointed FADA President C S Vigneshwar also asked the Indian government to issue strong directives to state governments for the full implementation of the Central Motor Vehicles Rules (CMVR), PTI reported.

Addressing Minister of Heavy Industries HD Kumaraswamy, the FADA President said that the industry needs the government's support in safeguarding the dealers' interest. "We need your support, and hence we request legislative safeguards to prevent OEMs (Original Equipment Manufacturers) from exiting the country abruptly, leaving dealers, employees, and customers stranded," he added. Vigneshwar stated that FADA’s highest policy priorities for the next two years will be the Retail Protection Act and the Model Dealer Agreement (MDA). "These are not just legislative matters, they are foundational to securing the future of dealerships across the country," he stated.

In the last seven years, since 2017, some of the major global auto manufacturers including Ford, General Motors and Harley Davidson have ceased their sales operations in Indian market. FADA has claimed that these exits have resulted in layoffs of thousands of employees who were working at the dealerships.

Meanwhile, the FADA President also sought government's support in reclassifying auto dealer workshops from the Orange Zone to the Green Zone. "Today, our workshops practice zero discharge, recycle water, and increasingly rely on solar power, making them environmentally sustainable," he stated.

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