The dealers claimed that they were sent official communication from the company on April 27, 2017 stating that they should prepare for the new Chevrolet Beat to be launched in the month of July. Within the next 15 days, GMI announced shutting down domestic sales in India. Incidentally, motoring journalists too were sent out invites for a test drive of the new Chevrolet Beat in May 2017 but a few days later were conveyed the company’s decision to stop domestic sales.
The dealers along with the Federation of Automobile Dealers Association (FADA) are contemplating putting up their plight in front of all concerned government ministries as well as before Prime Minister Narendra Modi. Further the dealers are closely studying all possible options available and are even exploring the possibility of filing lawsuits against General Motors in the US for the poor compensation being offered.
Dealers who spoke to Motown India said that after GMI told them about their decision to stop domestic sales in the country, they said they would be compensated a miniscule 5pc of the amount they had invested, which translated into losses to the tune of Rs. 7-8 crore per dealer. The company’s decision to stop domestic sales has also affected nearly 30,000 employees and staff of these dealers and their ancillaries, many of them stated.
As per the conditions set by General Motors, dealers who do not accept the terms by July 15, 2017 will receive only 50pc of the compensation while those who do not accept the terms by September 15 will receive nothing.
GMI dealer partners staged a protest along with FADA members. It may be recalled that in 2015 Mary Barra, CEO and Chairperson, General Motors had announced a USD 1 billion investment for India and 10 new locally produced vehicles from Chevrolet in the next five years. General Motors began a comprehensive review to address the performance of its global operations in June 2016. Thereafter, the company determined its greatest opportunity in India to drive shareholder growth was only in focusing on exports from India.
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However, dealers are claiming that during the period after Barra’s visit to India, the company promised them that efforts would be made to capture 10pc market share in the country. The dealers now say that they were completely misled by the company.
"It is a planned conspiracy, it is planned fraud. We were surviving seeing only dreams of those promises" says Amit Garg, Director, Shiva Motors, a dealer based in Ghaziabad in the outskirts of Delhi.
The dealer partners are demanding fair treatment and justice. Calling the compensation terms completely one sided, Sai Giridhar, Director, Nirmal Cars Pvt. Ltd. (based in Jaipur), said, "It is a non negotiable agreement from Chevrolet which now has a take it or leave it attitude. They have left all the dealers stuck with pressures from their banks as well as their employees".