Authorised dealers of GM India plan to suspend service support as they are unhappy with the company’s handling of its India exit. Dealers have stated that GM put clauses and targets (which bind dealers to procure the existing vehicle stock left at GM's manufacturing facility) before it compensates them for the losses after heavy discounts on sale of cars already in the dealers’ stockyards.
According to one dealer, "Customers are demanding hefty discounts on the cars at the moment and GM India is only thinking about liquidating its own inventories. It has given us a deadline of July 15 to sign up to pick up more cars, so as to be eligible for the losses on our existing stocks. With no major demand for Chevrolet Cars in the market, there is again a huge risk of investing more into this dead stock."
What has also left dealers unhappy is that the company has devised a standard formula to reimburse the infrastructural investments of the dealers. According to this calculation, after including large depreciation values in place, only 5 percent of the total money at stake will be reimbursed – that’s a figure ranging between Rs 7 crore and Rs 10 crore per dealership roughly.
"We are not a third world country anymore and want to be treated the same way as GM is handling this phase in Europe," said another dealer requesting anonymity. After the protest at Jantar Mantar in New Delhi, dealers want to adopt non-cooperation measures and will look at holding up service support to customers across India. This will mean that they will go on an indefinite strike to get the company's attention.
They also seek intervention of the concerned ministries, including the Ministry of Road Transport and Highways. The FADA (Federation of Automobile Dealers Association) is approaching the Prime Minister's Office to step in as well.
