The Federation of Automobile Dealers Associations (FADA) has asked the government to put in place a system to protect dealers from sudden exits by multinational manufacturers from the country. It said MNC exits not only hamper entrepreneurship of the dealers, but also hurt India’s brand value.

It demanded industry status for the auto retail sector in order to get priority lending from banks, external commercial borrowing, financing from top lenders, private equity investments, easier access to domestic and global funds and more tax benefits.

“This will boost the confidence of the sector and result in scaling up infrastructure by bringing in new investments. We, therefore, request you to kindly accord industry status to the auto retail sector,” Vinkesh Gulati, President, FADA, said here on Tuesday.

Addressing the third Auto Retail Conclave, which was attended by Minister of Heavy Industries Mahendra Nath Pandey, Gulati said the Ministry gives permissions to MNCs such as auto original equipment manufacturers (OEMs) to set up businesses in India and with Prime Minister’s ‘Make in India’ initiative, more MNCs will come to India.

“Once they begin their journey, they appoint dealers as their long-term partners. It is their sudden exits which hamper both, an entrepreneur's zeal to do business with them and the customers who are left high and dry with no proper support for after sales,” Gulati said.

Harley Davidson exit

For instance, American cult bike maker Harley Davidson’s exit last year had caused hardship forits dealership community. Similarly, dealers of US auto major General Motors were left in the lurch when the company decided to pull out of India in 2017.

Speaking at a session, Kenichi Ayukawa, President, Society of Indian Automobile Manufacturers (SIAM), urged the government to let dealer workshops function as inspection and certification centres under the Vehicle Scrappage Policy.

Inspection centres

“This is because the dealer organisation already has equipment, investment and expertise in testing the automobiles. Also, dealers are located close to the customers. If the government accepts our request of using existing automobile dealer facilities, it will be a big statement of trust by the government on automobile dealers,” he said.

Mahendra Nath Pandey, on his part, asked the automobile industry to support electric vehicles (EVs), saying it is emerging as a “big opportunity” and the auto sector is best poised to lead in the “Atmanirbhar” mission.

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