Need Clarity On Compensation Structure For Dealers: FADA President To Ford

Federation of Automobile Dealers Associations (FADA) President Vinkesh Gulati wrote to Ford India seeking clarity on the potential compensation structure for its dealer partners after announcing its exit from manufacturing in India. Gulati in a letter to Ford India President & Managing Director Anurag Mehrotra highlighted how customers were cancelling bookings following the exit announcement. According to him, dealers could potentially face huge losses.
"We would request you to kindly share with us the broad contours of the compensation structure, which you may have planned by now for compensating our members. This will not only help us in understanding the entire compensation process but will also assist us in handholding our members and ensure that the entire process is done in an amicable and justified manner," Gulati said in the letter.

He further added that the non-disclosure agreement (NDA) communication sent to the dealers by the north-American automakers does not carry a specific description of the confidentially clause. “While dealing with confidentiality, one can understand in case the financials owing to the proposed exit, which gets discussed with each independent dealer, should remain confidential, the recitals to the NDA should hence carry a specific description of the nature of things which needs to be kept undisclosed," Gulati said.

Ford announced its exit from manufacturing in India, last week. This was part of a major restructuring process undertaken by the company. The American firm had invested around $2.5 billion at its Chennai and Sanand plants and had incurred losses of $2 billion over the last 10 years. (Full Story)

FADA represents over 15,000 automobile dealers and 26,500 dealerships pan-India. It had expressed shock on the automaker's exit announcement as dealers are believed to have invested Rs 2,000 crore in creating their sales infrastructure.