FADA urges govt to bring in 'Franchisee Protection Act'

The Federation of Automobile Dealers Associations has urged the government to introduce a 'Franchisee Protection Act' to safeguard the interest of the customers, dealers and employees, in the aftermath of some auto manufacturers exiting India.

"Auto manufacturers shutting shops and exiting India overnight now brings a strong urge to introduce 'Franchisee Protection Act' in the country to safeguard the interest of the customers, dealers and employees...," the FADA said in a statement.

Following bike manufacturer UM Lohia's exit from India, FADA requested the intervention of Prime Minister's Office over the issue. It has also approached various ministries.

UM Lohia is a joint venture between the Lohia Group and American group UM Motorcycles, set up in 2016 to manufacture and sell in India 'American' style motorcycles under the brand of 'UM Motorcycles'.

Earlier, FADA, through its counsel, had issued a legal notice to UM Lohia, calling upon them to redress all grievances of dealers and to take steps to ensure the maintenance and servicing of motorcycles already sold in accordance with the warranty terms and law.

"Having received no satisfactory response from the company as well as its owners, FADA now has requested the Prime Minister's Office, Ministry of Heavy Industry and Public Enterprises, Ministry of Road Transport & Highways and Corporate Affairs Ministry to urgently intervene in the matter," the statement said.

"The said incidence is now the 3rd one after General Motors and Man Trucks' sudden exit from the country."

As per the statement, the plagued relationship between the owners has caused huge losses to "dealers and has exposed them to unwarranted litigation from customers for whom, dealers are the face of the company".

"FADA would want to solve this issue amicably as it has done in previous two cases of OEMs exiting India. But failing to get any response from UML, there may be no other alternative but to take the final recourse including civil and criminal proceedings," it said.

( With inputs from IANS )