FADA Shocked By Ford’s Exit Announcement, Worried About Dealer Losses

The Dealers Association estimates that Ford dealers had invested around Rs 2,000 crore in setting up dealerships

While close observers of the automotive industry would not have been surprised by Ford’s exit from India, the Federation of Automobile Dealers Association (FADA) has expressed its shock at the announcement.

FADA President Vinkesh Gulati mentioned in his statement, “There are ~170 Dealers who in-turn have ~391 outlets and have invested ~Rs 2,000 crore for setting up their dealerships.” “Ford India also appointed multiple dealers until 5 months back. Such dealers will be at the biggest financial loss in their entire life!”, added Gulati.

While Ford India President and MD, Anurag Malhotra, stated during Ford’s press announcement that the company has plans to try and retain 100 percent of dealerships, the FADA president is concerned that it may not be enough. The carmaker had also stated that it will work closely with its dealer network to restructure and help facilitate their transition from sales and service to parts and service support for its existing customers.

Also read: Ford India’s Latest Announcement Leads To The Cancellation Of The Facelifted EcoSport

The FADA statement also detailed that Ford’s dealers across the country are presently holding around 1,000 units in their inventory, which would amount to around Rs 150 crore. It also reiterated its request to the government for rolling out a Franchisee Protection Act that would offer protection and adequate compensation to dealers in such circumstances.

Ford will be stopping production and sales of its locally-made models right away but it will continue to operate its business solutions in India. The EcoSport and Endeavour are likely to be sorely missed as both SUVs had a following in the market. The American carmaker also intends to bring its global lineup to India, which would include the likes of the Mustang coupe, the Mach-e electric SUV, and the Raptor pickup, as imports. These models will be sold through select dealers in metro cities.

In the last five years, numerous Western carmakers have had to close their Indian operations due to accumulated losses. After Chevrolet and Fiat, the Indian car buyer has now lost Ford as well. The market continues to be dominated across segments by the Korean brands along with India’s homegrown automakers.