India distributor says Nissan can't walk away from pact unilaterally

Company offers no reason for move, but relations were under strain over poor sales

The partnership between Japanese automobile maker Nissan and Hover Automotive India, the only distributor for the company in the country, has gone for a toss. While Nissan Motor India says their distribution agreement is over, Hover denies that. The partnership has been under strain recently as dealers were unhappy after poor sales hurt service and sale of spare parts. Nissan has assumed responsibility for the sales, marketing and distribution of all its vehicles and parts in India, effective Friday.

Further details about the business structure will be announced in due course, said the company. However, Richard Spitzer, acting chief operations officer at Hover, said: “Negotiations with Nissan are ongoing at this stage and it is premature to say any agreement regarding termination has occurred.” He added though Nissan wanted to move quickly it was possible only with the consent of Hover and the latter were hopeful of an amicable resolution. Until then Hover expects to remain Nissan’s sole distributor.

“We would like to reiterate Nissan does not have any legal basis for the termination of services of its national sales company, Hover, in India. The management at Hover has taken strong exception to the announcement this morning by Nissan. It reserves all rights and remedies available and will pursue the necessary course of action to protect interest of its employees and stakeholders,” he said.

Despite that Nissan maintained it had terminated the partnership. Kenichiro Yomura, president for India at Nissan, said: “Nissan is now at a point of maturity in India where the time is right to establish our own marketing and distribution operations. Nissan’s priority will be to ensure a smooth transition from current operations. We remain committed to our customers and will continue to deliver high quality products and services.”

Earlier this month, Nissan’s Datsun brand said it would go with its own dealership.

Hover was appointed by Nissan in 2012 as the sole and exclusive distributor for managing the marketing, sales, after-sales service, training and dealer development in India. Nissan has 125 dealerships across the country and plans to increase that to 300 by 2016-17.