Indian auto dealers ask government for help after Ford exit setback

Photo: Bloomberg

By Aditi Shah

NEW DELHI (Reuters) - India's top auto dealers group has asked the Indian government to draft rules to safeguard their interests when global automakers decide to leave the market as Ford has said it will do.

The U.S. company this month said it will stop making cars in the country and end its over two-decades long presence. It took a $2 billion hit and said it does not see a path to profitability, but the auto dealers group said this has left dealers in the lurch.

The Federation of Automobile Dealers Association (FADA) said in a letter to India's industries ministry, sudden exits by global companies "cause great distress."

Reuters has seen a copy of the letter dated Sept. 21.

India's industries ministry could not be reached for comment outside regular business hours.

"We have a plan that ensures continued viable business for our dealer partners," Ford said in a statement, adding that it is also working with them to support existing customers.

"We are very confident that they (Ford) will conduct the discussions with utmost trust and transparency," Rajesh Shah, president of Ford's dealer council said.

Ford is the fifth major automaker to cease manufacturing in India since 2017, following exits by General Motors and Harley Davidson.

FADA's letter asked the ministry to draft a law to "safeguard the dealers' and customers' interests in India."

The group also called for legislation that would ensure adequate information is available to customers and dealers about unfair termination of dealership agreements.

Dealers invested about 24.85 billion rupees ($337 million) in retail outlets of the five brands whose exit has lead to a loss of about 64,000 jobs, FADA said.

 

(Reporting by Aditi Shah. Editing by Jane Merriman)


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel