FADA Calls For Franchise Protection Act in India

 

With the announcement of Harley-Davidson to close its India manufacturing facility, the Federation of Automobile Dealers Association (FADA) called for the need for a Franchise Protection Act in the country to avert brands from abruptly closing their operations leaving their channel partners and customers in a fix.

"It goes without saying that dealers who have invested their hard-earned capital in this iconic brand are left like an abandoned baby without any compensation package."

Consequently, FADA called for a Franchise Protection Act in India.

"With every brand closing its shop in India, India's capital flow goes down the drain. With a luxury brand like Harley, setting up its dealership costs anywhere between Rs 3-4 crore and with a total of 35 dealerships, Rs 110-130 crore will go down the drain," the statement said.

"Moreover, there will be customers who will not receive glitch-free service as spares will now be in shortage thus leading to cases and harassment to dealers from their customers."

 The association pointed out that a luxury two-wheeler dealership on an average employs 50 people.

"With 35 Harley dealers, around 1,800-2,000 people at dealerships will lose their jobs," FADA said.

According to the company, it is changing the business model in India and evaluating options to continue to serve its customers.

"Harley-Davidson plans to close its manufacturing facility in Bawal and significantly reduce the size of its sales office in Gurgaon (Gurugram)," the company had said in a statement.

"The company is communicating with its customers in India and will keep them updated on future support. The Harley-Davidson dealer network will continue to serve customers through the contract term."