Dealers of General Motors in India have decided to meet later this week to decide on the future course of action, including taking the legal route, against the American automaker over measly compensation.
A majority of 96 dealers, which operate around 140 showrooms across India, are unhappy with the company’s offer of just around 12% of total investments they have made as compensation.
“Some of the major dealer partners of the company will meet on June 24 in Delhi to decide on the future course of action against the company. They are totally dissatisfied with the way the company is dealing with them,” a source told PTI on the condition of anonymity.
Around 20-25 major dealers of the company, with many of them running multiple dealerships across the country, will take part in the meeting.
“These dealers are totally unsatisfied with the terms of settlement that the company has offered to them. Each one of these dealers are feeling cheated and misled,” the source said.
As per the conditions set by the company, a dealer who does not accept its offer by July 15, would only get 50% of the compensation amount being offered.
“In case a dealer does not accept the offer by September 15, he won’t get any of the compensation at all. Some of the dealers who have financial challenges may accept the deal being offered by the company. But there are many who are exploring ways to challenge the company,” the source said.
A dealer, who did not wish to be identified, said that the company totally misled them in terms of its future plans in the country.
“In May they (GM India) were telling us that there will new product launches and more investment will be done in the country and suddenly in June they announce the closure of domestic operations. They have completely misled us,” the dealer, who runs two dealerships in central India, said.
The dealers, among other things, would also decide whether to file a case in India or go for a class action suit in the US.
In 2015, the company had announced to invest $1 billion in India to enhance manufacturing operations and roll out 10 locally produced models in the country over the next five years.
In January this year, the American firm put on hold its investments on new models for the country as it undertook a full review of its future product portfolio in the country.
On May 18, General Motors suddenly decided to stop selling its vehicles in India as there was no turnaround in its fortunes here after struggling for over two decades to make a mark.
The company will now focus on exporting vehicles from its manufacturing plant at Talegaon in Maharashtra after it stopped production at its first plant at Halol in Gujarat last month.