Nissan in Trouble Over Contract Termination With Hover Automotive


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350Z

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This news is bound to bring a smile on face of many people who were upset with the arrogance of Hover Automotive. Some examples:

> http://www.theautomotiveindia.com/forums/dealership-reviews/13403-ichibaan-nissan-mumbai-cheat.html

> http://www.theautomotiveindia.com/f.../348-letter-nissan-india-ichibaan-nissan.html

> http://www.theautomotiveindia.com/f...r-ichibaan-nissan-fraud.html?highlight=nissan

Nissan India has terminated its contract for sales, after sales and spare parts network with Hover Automotive India with effect from today. This is a welcome move considering the company is also bringing the budget Datsun brand shortly in the Indian market and therefore can’t afford to risk with customer service anymore.

“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.” - Kenichiro Yomura, President, Nissan India.
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350Z

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Re: Nissan Terminates Contract With Hover Automotive For Sales Network

Hover Automotive has now issued a press statement informing that Nissan does not have legal basis for the termination of this contract:
At Hover Automotive India Pvt Ltd (HAI), we would like to inform all concerned that negotiations with Nissan are ongoing at this stage and it is premature to say any agreement regarding termination has occurred. HAI understands that Nissan wants to move quickly, but it is possible only with the cooperation and consent of HAI and we look forward to working with Nissan and are hopeful of an amicable resolution. Until then HAI expects to continue to be the sole and exclusive distributor for the Nissan brand of vehicles in India.

For the general benefit of Nissan India’s customers, media and all stakeholders, we would like to reiterate that Nissan does not have any legal basis for the termination of services of its national sales company- Hover Automotive India Pvt Ltd in India. The management at HAI has taken strong exception to the announcement this morning by Nissan. HAI reserves all rights and remedies available and will pursue the necessary course of action to protect interest of its employees and stakeholders.
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Re: Nissan Terminates Contract With Hover Automotive For Sales Network

This is turning out to be an ugly spat,this isn't going to do any good to the image of Nissan.Hope the involved parties resolve it amicably soon.
 
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Re: Nissan Terminates Contract With Hover Automotive For Sales Network

Good move by Nissan. I hope that they will either terminate incompetent dealers, and set things right with irritated ones. They ought to have started this way, but better late than never. Will definitely help them in the long run.
 
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Re: Nissan Terminates Contract With Hover Automotive For Sales Network

I can't understand why but car manufacturers tend to pick people with dubious reputations to represent them. Here in Bombay the vag group have made several bad choices, or maybe it's only people like that who are agreeable to the unfair conditions imposed.
 
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350Z

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Re: Nissan Terminates Contract With Hover Automotive For Sales Network

The latest development on this matter is that Hover has dragged Nissan to court. An excerpt from Times of India:
"HAI has already exercised legal options available to it to have the purported termination established as invalid and wrongful," the company said in a public notice. It, however, did not disclose in which court the case has been filed. Spokesperson of HAI also declined to disclose this, saying the company cannot comment beyond what has been put up in the public notice at the moment.

The development followed the announcement by Nissan on February 14 that it had terminated its sales, marketing and distribution agreement with HAI. Disputing the termination, HAI said it "has a binding legal distribution agreement with Nissan that establishes the long term distribution rights of HAI in India.

When contacted for comments, a Nissan Motor India spokesperson declined to comment saying the company stood by its earlier statement. Stating that it considers the "purported termination as invalid and ineffective", HAI cautioned persons having relationship with it against acting on the basis of Nissan's notice "regarding the alleged termination of distribution agreement, aimed at inducing a breach or termination of any relationship with HAI, and will need to consider the cost, damages, consequences and legal proceedings..."
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Hover Automotive is finally winding up its Indian operations. Quoting an excerpt from Livemint.
Hover has communicated to its employees that they will be kept on the rolls for three months only, starting March 2014, albeit without pay. Hover currently employs 180 people. “The business is being wound up,” said a senior Hover official who requested not to be quoted as he is not authorized by the company to talk on internal matters. “People have not received their last month’s (March 2014) salary and everybody has been told to look out (for jobs),” he added. A second official from the company confirmed the development.

Six years after they entered into the arrangement, Nissan on 17 February terminated its sales and distribution agreement with Hover. The decision didn’t go down well with Hover, which issued a public notice terming Nissan’s action as “invalid” and “ineffective”. Disputing the termination, Hover said it “has a binding legal distribution agreement with Nissan that establishes the long term distribution rights of Hover in India”.

Immediately after, Hover filed for an interim and emergency relief against Nissan Motor Co. Ltd at the Singapore International Arbitration Centre. In the proceedings that followed, Hover lost the arbitration in March.

“Losing this arbitration means the business will not come back to the company. But the case is still on and will take another 2-3 months to end,” said the second Hover official mentioned above, who also requested not to be quoted.

In an email response, a Nissan spokesperson said, “Due to the sensitive nature of this matter we have no further comment on Hover Automotive India.”
Meanwhile, an HAI spokesperson in an email response said, “The legal proceedings are under way and the matter is subjudice. We are bound by the confidentiality clause and therefore cannot comment at this stage.”

Except for Nissan’s alliance with Hover, the concept of a master franchisee has no precedent in India’s auto sector. Every automobile company in the country, from the oldest such as Maruti Suzuki India Ltd, to relatively new entrants such as Volkswagen, have appointed dealers on their own.
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