Ford says it will retain its service network in 240 cities in India
It has come to light that over 90 percent of Ford India’s service network will continue to function despite the carmaker having stopped its manufacturing operations here.
While the American firm did assure that it will provide parts, service and warranty support to its customers in India, recent developments reveal that owners of Ford cars will be able to service their motor at an authorised dealership for the next 10 years.
Furthermore, the carmaker is said to have freezed the cost of consumables and spare parts for the next 5 years and is said to have already stocked up the required components at its depots in Chennai, Delhi, Kolkata, Mumbai and Sanand.
Ford says it will have a presence in more than 240 cities, as opposed to 258 cities it had when it announced its restructuring programme in India.
Executive Director for Marketing, Sales and Service, Ford India, Vinay Raina, has said, “A significant majority of our dealers have signed up to the ‘Dealer Service Agreement’ which ensures that our customers will continue to have a Ford dealership to service their vehicles.”
According to him, the principle of compensation included facility size, business history, performance on both sales and service, appropriate stock as well as degrowth assumptions.
While Ford has agreed to compensate its dealers over the next few years for the potential loss of sales and service, it has become known that dealers are being paid their full margin on the sales front, despite the fact that sales are no longer taking place.
While the compensation will be calculated based on the average sales registered by the dealership in the last 14 months, the total amount will be paid in installments (every 6 months). Ford dealers are expected to get all their money back over a period of 4 years.
In addition, the settlement also takes into account the loss faced by Ford’s service network. Over the next 5 years, Ford will pay a dealer the amount lost as is and in addition, the company has agreed to compensate its dealer network for the potential reduction in service load in the near future.
Ford will also compensate its employees and suppliers and in all, the company is expected to spend around Rs. 5000 crores on its exit from the mass market segment in the country.