Valentine’s Day Break Up: Nissan dumps Hover Automotive to go it alone in India

Snapshot: Love is in the air this Valentine’s Day but not so much for Nissan India and Hover Automotive. After making the first move of announcing that it would handle the distribution and marketing functions of the Datsun brand independently, Nissan India has served up the second big move by dumping Hover Automotive. The Japanese automaker has terminated its distribution and marketing agreement with Hover Automotive.

Nissan Terrano SUV Pic
Nissan Terrano SUV used as an illustration

 

From here on, Nissan India will handle the distribution and marketing functions on its own. This move from Nissan is likely to placate dealers – who reportedly have been upset with Hover acting as the intermediary between Nissan India and themselves – and could also improve the dealership and after sales experience as the Japanese automaker takes a bigger interest in its last-mile operations. 

Notably, Nissan India appointed Hover Automotive in 2008, to handle marketing, sales, after-sales service and dealer development. The partnership ran into trouble in the end of 2012, when Nissan dealers began protesting against Hover Automotive by refusing to pick up stock. Although Nissan India stepped in and solved the issue between Hover Automotive and the dealers, the simmering discontent among Nissan dealers has continued to exist. When Nissan announced late last year that it would handle the sales and marketing functions of Brand Datsun independently, the move was seen as a precursor to the automaker taking over similar operations of Brand Nissan as well.

What has prompted Nissan to dump Hover Automotive and go it alone in India?

Nissan aims to garner 8 % global market share in the car market and an operating profit of 8 % by 2016-17 through the Power 88 Global Strategy. The Indian market is a key player in Nissan’s global strategy with the Japanese car maker seeking a 10 % market share here by 2016. Currently, Nissan’s market share in India hovers around the 1% mark. To increase market share in India by nearly ten fold, Nissan desperately needs to get the back-end operations in tune to support big volume product launches.

With Nissan outsourcing critical functions such as sales and marketing to Hover Automotive and focusing on the export market, the Japanese car maker was perceived to be going slow on the Indian market. Notably, Nissan India has just displaced Maruti Suzuki as the country’s second largest car exporter. With its latest move of assuming greater responsibility in the sales and marketing functions, Nissan India has reaffirmed its commitment to growth in India, one of the foremost emerging car markets in the world.

What can car buyers expect from the new set up at Nissan India?

  • For one, the after sales service of Nissan in India is likely to improve as this is crucial for the car maker’s success here, now that it is focusing on the big volume segments where after-sales service is a make or break factor for brands. 
  • A more consistent dealership experience is likely to be another result. 
  • A faster dealership and after sales network expansion what with the Datsun low cost brand now in the picture. 
  • India-specific products with featured attuned to buyer expectations and needs here. In other words, we might stop having Evalias with non-openable windows on the middle row and badge engineered products like the Terrano which actually don’t do much for sales as well as brand recognition in the long term.