Sudden exit of MNCs worries auto dealers
FADA seeks protection from loss due to such instances as dealer agreements are one sided; Automobile dealers insist on balanced model dealer agreements
image for illustrative purpose
New Delhi: Automotive dealers on Tuesday sought protection from loss in case of sudden exits of foreign automakers from India, besides seeking an equitable say in the running of business through the launch of a model dealer agreement.
The Federation of Automotive Dealers Associations (FADA) said many foreign automobile manufacturers have different contracts for dealerships in India, which are more stringent compared to what they have in their home countries. "There have been dealer agreements between OEMs and the dealer and primarily, it is one sided agreement. It only expresses the point of view of the OEMs and dealers have always felt the need for a balanced model dealer agreement," FADA president Manish Raj Singhania told PTI here on sidelines of FADA auto retail conclave.
He said through the Model Dealer Agreement (MDA) launched on Tuesday, the dealership community has tried to create a level-playing field between the OEM (Original Equipment Manufacturer) and auto dealerships.
"If there is any kind of issue in any auto industry or in the business, both should be able to get adequate compensation or adequate settlement, it should not be one sided," Singhania added. One of the key issues that the MDA seeks to address is the fallout of foreign auto manufacturers leaving India and the resultant sufferings of the dealers, he said.
"We have had few exits of OEMs, such as General Motors and Ford from India and dealers were in a position to lose a lot of money," Singhania said.
