On February 14, 2014, Nissan India terminated its 6 year long sales, marketing and distribution contract with Hover Automotive India Pvt. Ltd. Kenichiro Yomura, Nissan President, India Operations, 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.”
On the same day, Hover stated– “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.”
He added, “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.”
Post this, Hover public notice from yesterday states, “HAI has already exercised legal options available to it to have the purported termination established as invalid and wrongful.”
Hover declared the termination of agreement as invalid and ineffective and has exercised legal options to have the termination declared as such and has also cautioned those acting against it. Hover however has not disclosed in which court the case has been filed, while authorities at HAI have also refused to comment on the issue. HAI states that it has a binding legal distribution agreement with Nissan for a long term basis and that the termination of contract is a breach of this agreement.
Hover India management have stated that they will continue to manage Nissan operations in India until final decision is arrived at. On the other hand, Nissan have confirmed that they are not associated with Hover anymore.