[TusharK]

The Parliamentary Standing Committee (PSC) headed by Dr. K Keshava Rao has recommended that the Government of India should introduce a Franchise Protection Act for car dealerships.



India does not have a Franchise Law, which is why agreements between OEMs and dealers often favour the former. This leads to short term agreements with no clear exit policy.

There have been instances where vehicle brands have suddenly announced their exit from India leaving dealers in jeopardy. Almost all dealerships are privately owned proprietorship or family owned businesses and find it difficult to stand up against big corporations. Therefore, a Franchise Protection Act is said to be the need of the hour.

A Franchise Act is also expected to benefit customers in the long run. Dealerships will be able to offer necessary services, while also providing stable employment.

Countries like the USA, Mexico, Brazil, Spain, Albania, Russia, China, Indonesia, Malaysia, Japan, Australia, Italy, Sweden, and Belgium already have rules in place to protect franchisees.

[SideView]

Good move. Businessess/Dealers are getting Protection acts and not left at mercy of OEMs.

Yet here we are still waiting for robust customer protection acts as these business take advantage of customers the most.


Eg:
https://www.team-bhp.com/forum/india...-cars-new.html (Assam temporarily cancels Maruti dealer's trade license for selling repainted cars as new)

I doubt if something like above would even have been thought if there was serious consequences.

[GTO]

Oh God, no! I have seen how franchise protection has destroyed the car retail experience in the USA. Manufacturers cannot divorce poorly performing dealers, even if they suck at customer service or engage in shady tactics. In USA, the new car buying experience is one of the most dreaded situations for anyone.

I don't want to see any kind of "protection" for car dealers in India. If they want to stay in the game, they will have to perform at a certain level.

[AutoNoob]

Originally Posted by TusharK

India does not have a Franchise Law, which is why agreements between OEMs and dealers often favour the former. This leads to short term agreements with no clear exit policy.

Originally Posted by SideView

Good move. Businessess/Dealers are getting Protection acts and not left at mercy of OEMs.

Yet here we are still waiting for robust customer protection acts as these business take advantage of customers the most.

Originally Posted by GTO

Oh God, no! I have seen how franchise protection has destroyed the car retail experience in the USA. Manufacturers cannot divorce poorly performing dealers, even if they suck at customer service or engage in shady tactics. In USA, the new car buying experience is one of the most dreaded situations for anyone.

I don't want to see any kind of "protection" for car dealers in India. If they want to stay in the game, they will have to perform at a certain level.

In my opinion this is good move.

We can not kill a good initiative just because there are few rotten apples in the eco system. Exceptions can be built-in that enable OEMs to kick out shady dealers.

Final law will depend upon who comes out on top in the lobbying slug-fest : SIAM vs. FADA