In what seems to be a classic case of break up gone bad, Hover Automotive India (HAI) has taken partner Nissan India to court over invalid termination of agreement. The move comes in retaliation to Nissan’s decision to handle sales, marketing and distribution of its cars independently without HAI’s support. Ironically, Nissan India announced on the 14th of February, the termination of agreement and Hover says it wasn’t even informed earlier about the decision taken by the manufacturer.
Nissan had appointed Hover as its national sales company in 2005, and was solely responsible for the marketing, after-sales and service, dealer training and development functions for Nissan in the entire country. Trouble in paradise started brewing up after Nissan experienced poor sales for its vehicles. Even customers didn’t seem too happy with the service provided by Hover Automotive while buying or with the servicing of the vehicles.
Hover Automotive says that it has already exercised the legal options available to have the alleged termination established as invalid and wrongful. The company states that Nissan has a binding distribution agreement with HAI that establishes the long term distribution rights for its cars in India. The company did not disclose in which court the case was filed. HAI also cautioned its vendors and suppliers working with both the companies to not work against the company’s interests on the basis of Nissan’s notice or they would be liable to legal proceedings.
Nissan on the other hand announced that it will directly retail its products from its existing dealers that were appointed by Hover, and will soon announce its business structure for the Indian market. The company also made it clear that the upcoming Datsun brand will be retailed by Nissan itself, through its existing dealer network. Both the companies would want to make sure that their individual problems don’t affect the end customer. What do you think Nissan should have done to end this relationship on good terms? Let us know in the comments below.