Honda Cars India adopts 83% of FADA's model dealer agreement, further study planned

Honda Cars India has recently incorporated 83% of the model-dealer agreement proposed by The Federation of Automotive Dealers Association (FADA) into its new dealer agreement. 

In September of last year, FADA introduced the first model dealer agreement, also known as the MDA. FADA, a lobbying group representing over 15,000 auto dealers with 26,500 outlets nationwide, designed the MDA to establish a fair and balanced framework for dealer partnerships and original equipment manufacturers (OEMs).

This move by Honda Cars India follows the precedent set by MG Motor India, which became the first automobile manufacturer in India to accept the MDA in January this year. By embracing the MDA, auto manufacturers like Honda Cars India and MG Motor India aim to provide their retail partners with an equitable platform for operating their sales businesses, the FADA officials said.

The introduction of the MDA by FADA was in response to a series of sudden exits by OEMs, including General Motors, MAN Trucks, UM Lohia, and Harley-Davidson, which occurred within a short span of time. FADA has also approached the government to advocate for the implementation of the Auto Dealer Protection Act, as the absence of franchise-related legislation in India has resulted in a complex regulatory landscape.

The Indian Contract Act, Specific Relief Act, Competition Act, Insolvency and Bankruptcy Code (IBC), and Intellectual Property Act are just a few of the laws that currently govern the relationship between dealers and manufacturers in India.