FADA seeks legislative safeguards to prevent OEMs exiting abruptly

Abrupt exit of OEMs: Automobile dealer body FADA on Wednesday sought legislative safeguards to prevent companies from exiting the country abruptly in order to safeguard the interest of dealers and employees working at the dealerships.

Speaking at the 6th Auto Retail Conclave here, newly appointed President of the Federation of Automobile Dealers Associations (FADA) C S Vigneshwar also asked the government to issue strong directives to state governments for the full implementation of the CMVR (Central Motor Vehicles Rules).

Addressing Minister of Heavy Industries HD Kumaraswamy, Vigneshwar said, "We need your support, and hence we request legislative safeguards to prevent OEMs (Original Equipment Manufacturers) from exiting the country abruptly, leaving dealers, employees, and customers stranded."

Various automotive OEMs like Ford, General Motors and Harley Davidson have ceased sales operations in India since 2017.

As per FADA, it has resulted in layoffs of thousands of people working at dealerships.

Vigneshwar asked Minister for Road Transport & Highways Nitin Gadkari to issue strong directives to state governments for the full implementation of the CMVR.

He also sought government support in reclassifying auto dealer workshops from the Orange Zone to the Green Zone.

"Today, our workshops practice zero discharge, recycle water, and increasingly rely on solar power, making them environmentally sustainable," he stated.

He stated that FADA's highest policy priorities for the next two years will be the Retail Protection Act and the Model Dealer Agreement (MDA).

"These are not just legislative matters, they are foundational to securing the future of dealerships across the country," he stated.

FADA represents a network of over 15,000 automobile dealers with 30,000 dealerships, accounting for 90 per cent of the auto retail industry coverage in India, Vigneshwar said.

"Together, we employ over 50 lakh people across dealerships and workshops, contributing not just to the economy but to the very fabric of Indian society by providing employment opportunities and fostering inclusive growth," he added.