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Four days after Japanese auto major Nissan has announced that it has terminated agreement with its sole distributor Hover Automotive India (HAI), the latter today said that it has exercised legal options against Nissan for "purported" termination of the distribution agreement. The company also said Nissan's action as invalid and wrongful.
HAI, in a public notice, said that it is considering the purported termination by Nissan Motor India and Nissan Motor Ltd, Japan together of the distribution agreement with HAI by their letter February 14, 2014 as "invalid and ineffective".
"HAI has exercised legal options available to it to have the purported termination established as invalid and wrongful. HAI has a binding legal Distribution Agreement with Nissan that establishes the long term distribution rights of HAI in India".
While an email sent to HAI was not responded till the time this story going to press, for a detailed e-mail questionnaire Nissan spokesperson said that “Nissan carefully considered all options available to it and took appropriate advice before terminating. Due to the sensitive nature of this matter we have no further comment. We are focussing on our Indian Operations to ensure minimal disruption and to provide our customers with a seamless transition.”
HAI notice added that, persons having a relationship with HAI are cautioned against acting on the basis of Nissan's "alleged" termination of the Distribution Agreement or any other or action of Nissan, aimed at including a breach or termination of any relationship with HAI, and will need to consider the cost, damages, consequences and legal proceedings, that they would expose themselves and legal proceedings, that they would expose themselves to if they do act on the basis of such notice or action of Nissan.
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.
Last week, after terminating the Agreement, 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.
