Ford talks up compensation with dealers

Ford India on Wednesday met its principal dealers to work out a compensation formula as it prepares to exit India's automobile market as part of a restructuring it announced on September 9. Most of the company's 170 dealers signed a non-disclosure agreement — a precondition set by the company to start negotiations.

The day-long meeting hosted by Anurag Mehrotra, Ford India managing director, was attended by 10 principal dealers of the company at its corporate office in Gurugram.

As part of the restructuring plan, Ford will cease production of cars and sport utility vehicles at its plants and will sell vehicles only till stocks last.

In a response to a query on the company's dealer compensation plan, a spokesperson for Ford India said, “We have a plan that ensures continued viable business for our dealer partners. We like to share those details first with our dealer partners than anyone outside."

Meanwhile, in a meeting with Minister of Heavy Industries (MOHI) Mahendra Nath Pandey on Tuesday, the Federation of Automobile Dealers Association requested the ministry to act as an intermediary between dealers and the company.

"This is to ensure all dealers get fair compensation and the company gives a written commitment

regarding servicing the vehicles for 10-15 years," said a person who attended the meeting. The Ford India spokesperson said the company is working with its dealers. "We continue to maintain full customer operations for our existing customers with service, aftermarket parts, and warranty support,” he said. The 170 dealers have 391 outlets and have invested approximately ~2,000 crore for setting up their dealerships. Cumulatively, dealerships employ around 40,000 people. Dealers currently hold 1,500 vehicles, which amount to ~150 crore via inventory funding from reputed Indian banks.