Nissan India and Hover Automotive India talks on for a joint venture (JV)

A Financial Chronicle report points to developments that will see Nissan Motor pick up a minority stake in Indian partner, Hover Automotive India that is in responsible for handling marketing, sales, after sales activity, and dealer development. The latter is Nissan Motors exclusive strategic alliance partner in India, and once the alliance is formed, Nissan India will be Hover’s 4th JV partner, the other 3 being Kevin Whalen, G Mohan Singh, and Moez Mangalji from Westmont Group.

Hover Automotive India has appointed upward of 45 Nissan India dealers and the number will touch 100 by 2013 spanning 85% of the Indian auto market. This week saw the launch of the new Nissan Sunny sedan petrol for an entry level price of Rs 5.78 lakh (ex showroom Delhi), with clear indication of a diesel variant launch in early 2012.

Once the JV is formalized, Hover Automotive India would be the chosen national sales company for Nissan Motor India.  Thereafter, the company would not sell cars on a commission basis but would handle overall inventory and purchase cars from Nissan India, and sell them to dealers. Hover Automotive India would invest more for the proposed JV to finance holding inventory, and retain majority holding in the JV.

The Renault Nissan Automotive India alliance Oragadam plant is being used to max capacity as Renault is using the spare capacity allocated to Renault for Micra production to meet local market demand. It has also been mentioned that Indian staff learnt well and could retain their knowledge. Furthermore, Nissan feels Indian auto component suppliers are quality and cost competitive.

Corporate VP Africa, Middle East & India at Nissan, Gilles Normand had this to say. “The Indian customer too is extremely choosy and demanding and is not satisfied with a sub standard product. He wants the latest technology and is willing to pay only a reasonable price. This is extremely demanding from a manufacturing and development perspective and forces us to learn a certain sense of frugality, which is something Japan was known for decades ago and is unfamiliar territory for us now,”