Lok Sabha Speaker Om Birla, on Friday, said that automobile dealers are an integral component of the automotive ecosystem and will soon be presenting the Model Dealer Agreement (MDA) in the House for discussion. He added that he was optimistic of having a “fruitful discussion” on the same.
“The Indian government has been working tirelessly to cut carbon emissions and create a greener India. The automobile industry must play a key role in this inspiring endeavour. Dealers are key point of contact for customers, and they carry a big responsibility for raising awareness about this mission...we will soon be presenting the Auto Dealer Protection Act and Model Dealer Agreement in the House for discussion,” he said here at the Auto Summit 2023, the biennial flagship convention of the Federation of Automotive Dealers Association (FADA).
Meanwhile, FADA said MG Motor India has become the first automobile manufacturer in the country to accept its MDA that provides the retail partners equitable say in the running of the auto sales business.
The association launched the MDA in September last year with an aim to reverse what has been traditionally a “one-sided agreement” between automakers and their dealers and make their contract a more balanced one.
MDA is an important part of the new age dealer association and management creating a level playing field for original equipment manufacturers (OEMs) and dealers working together to provide some of the most innovative, cutting-edge products and services to Indian customers.
One of the key issues that the MDA sought to address was the fallout of foreign auto manufacturers leaving India and the resultant sufferings of the dealers.
For instance, when Ford decided to exit from India in 2021, some dealers claimed they were taken by surprise as just a month before the announcement, the company had issued letters of intent for setting up new showrooms.
In 2017 also, when General Motors exited India, dealers were left in the lurch claiming they suffered around Rs.1,000 crore loss but were offered compensation of just about Rs.100 crore.
“Our dealer network is a key component of the automotive ecosystem, providing over 4.5 million jobs and a large ongoing investment in addition to being a key contributor to revenue generation for states and the Centre. The automotive sector has been on a roller-coaster ride in recent years, but it has weathered the storm,” Manish Raj Singhania, President, FADA, said.
He said the past few months have clearly shown signs of revival, with increased commitment and trust among customers and the members of the automotive industry and was optimistic that this momentum will continue.