GM dealers to protest at Jantar Mantar on Tuesday over 'inadequate' compensation

A smooth and rapid exit from India looks unlikely for General Motors with disgruntled dealers and their employees set to stage a day-long peaceful protest in Delhi against the terms of the settlement handed out to them by GM India.

“GM dealers and their employees would be sitting on dharna to draw the attention of the concerned ministries about the sad plight of the dealers and the loss of over 15,000 jobs”, said a Federation of Automobile Dealer Association (FADA) member.

A dealer said this move was unprecedented.

“Never before have automobile dealers resorted to dharna as a method of protest," said one of the dealers. "But anguished by decision of GM India to quit the domestic market without keeping their long-standing dealers in the loop, we have been forced to do this too. FADA received permission of the authorities to stage a peaceful dharna at Jantar Mantar on Tuesday.”

GM, one of world’s biggest car making companies, decided last month to pull the plug on its loss-making India operations after years of trying to make it self-sustaining.

The company, which sells the Chevrolet brand and was one of the first foreign automotive brands to set foot in India, said it will stop domestic sales and instead focus only on exports.

GM had about 96 dealers in India operating around 140 showrooms across the country. The US-headquartered firm promised to compensate its dealer partners. However, dealers are unhappy with the compensation amount.

"GM India recognises the strong partnership with our dealers and is providing our dealer partners with a fair and transparent Transition Assistance Package based on a methodology that is consistent across all dealers. This has not changed. The methodology is then applied to the individual circumstances of each dealership. These discussions with individual dealers are confidential and it would not be appropriate to discuss them publicly. Our dealers are important partners in implementing our transition plan, which is focused on providing continuity and peace of mind for our customers,” GM said in statement.

GM is reportedly offering just 10-15 percent of the total investment its dealers made in setting up the showroom infrastructure as compensation. Dealers are even considering filing a class action lawsuit against GM in the US over the "inadequate" compensation offered to them.

The last time an automobile maker was dragged to the courts was when Italian giant Fiat did not honour its promise of bringing the Jeep brand to India within the stipulated time frame. Dealers had individually filed lawsuits demanding compensation.

Meanwhile, General Motors India said it has now begun regular shipment of the sedan version of Chevrolet Beat from its Talegaon export hub to Latin America markets.

A consignment of 1,200 Chevrolet Beat sedans was on Monday loaded for shipping to Latin America, following the start of production on June 5..

Asif Khatri, VP - Manufacturing, GM India said, “Our Talegaon facility is a key export manufacturing hub for GM. GM India’s exports have more than tripled in the past year. GM was India’s third largest passenger vehicle exporter in May - recording our highest monthly total of vehicle exports at 8,297 units.”

Earlier this year, GM India began exporting the Chevrolet Beat hatchback to Latin American markets.