Auto Retail Fraternity Disheartened By Ford Indias Decision

Ford India announced that it will stop manufacturing vehicles in India for local sales with immediate effect. The production for exports will cease gradually. Federation of Automobile Dealers Association, said that the entire auto retail fraternity is shocked by Ford Indias decision and also released a press release on Ford Indias shocking announcement.

Speaking in this regard, FADA President Mr. Vinkesh Gulati commented, "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.

He further added, 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 around 1,000 vehicles in stock which amount to Rs 150 crore via inventory funding from reputed Indian Banks. They also have some demo vehicles which are hundreds in number. Ford India also appointed multiple new dealers five months back whereas these dealers will be at the biggest financial losses for their entire life with the announcement of this news.

FADA is still requesting the Government of India to introduce Franchisee Protection Act as due to its unavailability, auto dealers are not adequately compensated like their counterparts in many other countries, where this law exists. 

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Parliamentary Committee on Industry in its report number 303 which got released in December 2020 recommended the Ministry of Heavy Industries that the Government should enact the Franchise Protection Act for Automobile Dealers in the country so that there is a win-win situation for both, the Auto Original Equipment Manufacturers (OEMs) as well as the Auto Dealers. This will also benefit its customers in the long run.

Ford  India is the 5th biggest exit from Indian markets since 2017, after General Motors, Man Trucks, Harley Davidson, UM Lohia, and multiple electric vehicle brands.

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