Break Up Blues – Hover Automotive India goes under

The former marketing and distribution partner of Nissan India, Hover Automotive India (HAI) is folding up. The company has given a 3 month unpaid notice to its 150+ employees, asking them to seek other jobs as Hover is set to close down. Hover Automotive India was appointed by Nissan in 2008, as the latter’s marketing and distribution wing for the Indian car market. A master franchisee for Nissan, Hover handled sales and service aspects of the business including dealership operations.

Nissan Terrano SUV Image
Nissan Terrano SUV used as an illustration


Ironically, Nissan terminated its partnership with Hover on the 14th of February, 2014, instead choosing to go it alone in the Indian market. In the months prior to the break up, Nissan India had indicated which way the wind was blowing by setting up a marketing and sales department independent of Hover for Brand Datsun. Hover Automotive has filed a suit against Nissan India, alleging breach of contract. While the legal matter is sub judice, Hover has already lost an independent arbitration proceeding it instituted against Nissan India in Singapore, pleading for emergency relief.

Nissan and its dealers haven’t been happy with Hover Automotive’s functioning over the past couple of years. Nissan dealer have been restive and unhappy about Hover Automotive acting as the intermediary between them and Nissan India. The after sales service network set up by Hover has also come under criticism for poor service by car buyers. By dumping Hover, Nissan India is assuming a greater responsibility in the Indian car market, choosing to handle all functions of the car business by itself.

Post its split with Hover, an improvement in dealership and after sales service are likely to be the top priorities of Nissan India. The car maker needs to ramp up its dealership and after sales service center strength across India quickly as the mass market Datsun brand needs more touch points if big volumes are on Nissan’s mind. While the Datsun Go hatchback has been priced competitively, rivals of the car such as the Maruti Suzuki Alto 800 and the Hyundai Eon are more accessible to buyers given Maruti and Hyundai brands’ larger sales networks across the country.

Via LiveMint