The Michigan-based carmaker, Ford, may have announced its exit from India in September, but it will still play its role in the Indian market as more than 90 per cent of its dealers are expected to continue operations.
As a result, Ford, despite the departure, will continue to cater to its customer base in almost 250 cities. The company also mentioned that discourse about the next course of action for the rest, 10% of the dealers, is still simmering in the board rooms, reports Autocar. The exit of the American manufacturer from India brought along consequences for both dealers and customers. However, the company made sure that the withdrawal of operations is as smooth as possible. Ford has offered to pay compensation to the dealers spanning the next few years to cover the potential loss.
“Let’s say, a dealer usually sells 200 vehicles, and the dealer margin is Rs. 60,000-70,000, along with incentives. With sales no longer happening, the company will pay the dealer Rs.1.4 crore, i.e., Rs.70,000 loss for each unit,” a source close to the company told Autocar. In addition, as far as customers are concerned, Ford has also factored them in and has entered into a Dealer Service Agreement.
The agreement will ensure that Ford customers will have a dealership to service and repair their vehicles. “A significant majority of our dealers have signed up to the Dealer Service Agreement, which ensures that our customers will continue to have a Ford dealership to service their vehicles,” said Vinay Raina, executive director, Marketing, Sales and Service at Ford India.
According to previous media reports, it was projected that the company would spend roughly Rs 5,000 crore on its exit from the mass market segment, i.e., India. Ford’s addition to the list of American automakers leaving the country makes it the third auto giant to exit in four years, after General Motors and Harley Davidson
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