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HomeEconomyFord's exit from India opens dealers to legal action from customers

Ford’s exit from India opens dealers to legal action from customers

Dealers will likely face 'legal complications' given that consumer law makes them liable after a manufacturer exits, president of Federation of Automobile Dealers Associations said.

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New Delhi: Ford Motor Co. dealers in India face potential legal action from customers after the U.S. auto giant decided to shut its factories in the country.

Dealers will likely face “legal complications” given that Indian consumer law makes them liable after a manufacturer exits, Vinkesh Gulati, president of the Federation of Automobile Dealers Associations, said in an interview with Bloomberg TV.

“We expect Ford to give some compensation to dealers and plan something in future so that dealers aren’t in a legal strangle against customers in consumer court cases for their service responsibility,” Gulati said.

Dealers invested about 20 billion rupees ($272 million) building Ford dealerships in India, which employ about 40,000 people, he said.

Separately, Gulati said the auto industry is losing 20% to 30% of potential sales each month because the global semiconductor shortage has led to long waiting periods for cars.

Mahindra & Mahindra Ltd.’s Thar SUV has a waiting period of 12 months, while there’s a six-month wait for Hyundai Motor India Ltd.’s Creta SUV.

“I’m hoping customers stay with us and when the semiconductor shortage is gone they actually buy the vehicle, and we don’t lose this vehicle to used-car market,” said Gulati.-Bloomberg


Also read: First GM, now Ford — why India is becoming a graveyard for world’s auto giants


 

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