NEW DELHI: A total of 64,000 jobs across dealer showrooms were lost and investment worth Rs 2,485 crore went in drain due to exit of five big automobile manufacturers from India in recent years, estimated Federation of Automobile Dealers Associations (FADA) on Thursday.
Since 2017 as many as 5 big names, mostly US automakers, have wound up from the Indian market, citing poor sales.
The biggest exit came last month when local unit of Michigan-based Ford announced closing its two manufacturing facilities and wrapping up sales of its passenger vehicles.
According to Fada, Ford alone accounts for 40,000 employment loss and its 170 dealers are expected to lose Rs 2,000 crore. This is over and above 4,000 directly employed by Ford India.
“The sudden exits by these MNCs cause great distress to the entire auto retail industry and hamper both, the entrepreneur’s zeal to do business and the customers’ interests, by leaving the customers high and dry with no proper after-sales support. This not only tarnishes the dealers’ name in the society, as the dealers are the face of the brand, but also tarnishes brand India’s value,” said Fada President Vinkesh Gulati.
While Ford maintains that this is not an exit, Gulati said the modalities of the so-called restructuring of Indian operations suggest otherwise.
Ford had previously said it will continue to provide after-sales services to its customers and sell premium vehicles via import route in India.
It had also said that it would adequately compensate dealers who continue to offer after-sales services to customers.
FADA, however, in a letter written to Mahendra Nath Pandey, Minister of Heavy Industries, claimed that Ford India is forcing its dealers to first sign non-disclosure agreement (NDA) latest by September 14, 2021 before any compensation package is worked out.
Gulati urged the minister to initiate a formal discussion on Automobile Dealers’ Protection Act, and its importance to protect small and medium enterprises, their employees and the customers.
Other big exits are General Motors (in 2017), Man Trucks (in 2018), UM Lohia (in 2019), Harley Davidson (in 2020). 15,000 jobs were lost when GM exited India, 4,500 when Man Trucks, 2,000 when Harley Davidson and 2,500 when UM Lohia closed their retail operations in India.