The Federation of Automobile Dealers Associations (FADA) is not happy with Ford India’s decision to wrap up the operations, obviously, and termed it as a “shocking announcement”. FADA President Vinkesh Gulati has expressed concerns about dealers’ existing inventory and the loans they borrowed for the same. He also expressed concerns about the recently appointed dealers –
The auto retail fraternity is really shocked to hear another US auto major, Ford India’s announcement where it has said that it will shut down production with immediate effect. While trying to handle Dealer anxiety, Ford India President & MD, Mr. Anurag Mehrotra called me personally and assured that they will adequately compensate dealers who continue to offer vehicle service to customers. Though this is a good beginning, it is not enough as there are ~170 dealers who in-turn have ~391 outlets and have invested ~INR 2,000 crore for setting up their dealerships. While Ford India employs 4,000 people, dealerships employ around 40,000 people without displacing them from their home locations thus being continuously skilled and up-skilled all this while.
Ford India dealers currently hold ~1,000 vehicles which amount to ~INR 150 crore via inventory funding from reputed Indian banks. They also hold demo vehicles which are 100’s in numbers. Moreover, Ford India also appointed multiple dealers until 5 months back. Such dealers will be at the biggest financial loss in their entire life!
FADA has been requesting the Governing of India to roll out Franchisee Protection Act and due to its unavailability, auto dealers are not adequately compensated like their counterparts in Mexico, Brazil, Russia, China, Indonesia, Malaysia, Japan, Italy, Australia, Sweden and many other countries, where this law exists. After General Motors, Man Trucks, Harley Davidson, UM Lohia and multiple fly-by-night Electric Vehicle players, Ford India is the 5th biggest exit from Indian markets since 2017.
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