GM confident of India dealer settlement

new delhi — General Motors Co is confident of reaching a settlement with dealers in India before halting sales in the country even though half say the compensation on offer is too low, people familiar with the matter said after the first round of talks.

The US automaker last month said it would stop selling passenger cars by the end of the year after two decades in a market where it commands less than one per cent.

It is now tasked with minimising fallout as it restructures its money-losing India operations, which will continue making cars for export. At the same time, the firm has had to fend off an attack from a hedge fund demanding change at the top after a 16 per cent stock price fall during the current chief executive officer’s tenure.

GM concluded a first round of talks on Wednesday with its 96 India dealers, who operate 120 dealerships, and the company is confident its settlement terms will be accepted by a large majority, a person at GM India said on condition of anonymity.

GM told Reuters discussions with dealers were confidential.

“We are meeting with dealers individually and working through a plan that addresses their concerns,” a spokesperson said. “GM India is working directly with our dealers to transition to authorized service outlets and to recognise some of the investments made in dealerships.”

But GM’s Dealers Association Board (DAB) comprising 15 highsales dealers said the compensation on offer was “negligible and not sufficient”, in a June 6 email to chief executive officer Mary Barra, shown to Reuters by one DAB member.

Two other DAB members told Reuters that about 50 dealers were dissatisfied with the terms and have contributed to a fund created by DAB for use in the event of any legal action. —