FADA Franchise Act
The Federation of Automotive Dealers Association (FADA) recently released a policy brief to introduce the Auto Dealers Protection Act in India. Including MAN Trucks exit in 2018, five Original Equipment Manufacturers (OEMs) exited from the market on the whole. It is said that these OEMs by stalling domestic sales, exited a large and untapped market. This is known to have adversely impacted consumer interest leaving them with no avenue for after sales services. Add to it the resale value of such vehicles are said to have nose dived. This in turn has caused undue burden on the dealerships expected to step in to save their customer relationships. Such unilateral OEM decisions are also said to burden the dealers with a barrage of customer complaints. The predominantly small and medium enterprises, have alleged that the community has lower bargaining power in comparison to the OEMS that are large corporations in comparison. The community is contesting the existing laws to protect their interest. Commenting on the same,
FADA President Vinkesh Gulati said, “Many countries in the world recognise the inherent power imbalance between OEMs and Dealers within the automobile sector and have enacted legislation for a level playing field. Unfortunately, the existing legal regime in India is inadequate to address these specific concerns of dealers.” “While OEM-Dealer agreements are governed under the Indian Contract Act, the law does not contain any clear solutions for us,” he stated.
The Government of India (GoI) has formed seven new companies out of the Ordnance Factory Board (OFB). Aimed at enhancing the functional autonomy, efficiency and to unleash new growth potential and innovation, the GoI had decided to convert OFB from a government department into seven 100 per cent government-owned corporate entities as a measure to improve self-reliance in the defence preparedness of the country. Munitions India
Ltd. (MIL), Armoured Vehicles Nigam Ltd. (AVANI), Advanced Weapons and Equipment India Ltd. (AWE India), Troop Comforts Ltd. (TCL) (Troop Comfort Items), Yantra India Ltd. (YIL), India Optel Ltd. (IOL) and Gliders India Ltd. (GIL). These companies are known to have commenced business from October 01, 2021. Citing an increase of 325 per cent in defence exports over the last five years, PM Narendra Modi lauded the industry for making competitive costing the nations’ strength. He urged the industry to make quality and reliability the country’s new identity. He also urged startups to come forward. Defence Minister Rajnath Singh reiterated the GoI resolve to transform Ordnance Factories into productive, and profitable assets; improve expertise in product range; increase competitiveness; improve quality; enhance cost-efficiency and ensure self-reliance in defence preparedness.
Often, commercial vehicles do not have a standard quality of reflective tapes, which affects visibility and elevates road fatalities in extreme conditions like in poor visibility, night rides, and heavy monsoons. To avoid catastrophes, Madhya Pradesh Transport Commissioner has issued instructions to all state RTO’s to mandate the use of standard quality Retrospective tapes. The quality of Retrospective tapes should follow Automotive Industry Standards(AIS) norms. The process is digitised by the department and a SOP has been initiated. Also manufacturing of these reflective tapes are handed over to experienced manufacturers, approved by authorised agencies which follows the rule 126 of the Central Motor Vehicles Rules 1989 registered by the transport department. By doing this high quality of reflective tapes will be used. “The certificate of reflector tape installed on the vehicle by the authorised dealers of the manufacturers will be generated and printed through the portal itself.
On the certificate, detailed information of the reflector tape installed on the vehicle such as length, width, colour, year of manufacture of the tape, code, manufacturer, name of the vehicle and details of the vehicle like vehicle registration number, chassis number, engine number, vehicle category, body type of vehicle will be mentioned,” said Transport Commissioner Mukesh Jain. The certificate offered will be available online, and a QR can be scanned while verifying details. Further if the fleet owners fail to follow the rule, a fitness certificate of the vehicle will not be issued, “Before issuing the fitness certificate of the vehicle, it will be mandatory for the concerned RTO to verify the reflector tape of rear marking plate fixation certificate through the portal. Only after that the fitness certificate can be issued,” concluded Jain.