The Telegraph
Saturday , February 15 , 2014
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Nissan cuts sales ties

The Japanese company said local subsidiary Nissan Motor India Private Ltd would take charge of distribution from today.

Hover has disputed the move, saying the action had no legal basis and the pact was still intact.

It said it would “pursue the necessary course of action to protect interests of its employees and stakeholders”.

The Indian dealer had a broad-based exclusive arrangement with Nissan that not only involved distribution but also sales and marketing activities.

“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,” Nissan president (India operations) Kenichiro Yomura said.

Two months ago, Nissan announced that it would not sell its “ultra low-cost” cars, under its revived Datsun brand, through its sales and service partner Hover.

The Japanese company said it would sell the Nissan and Datsun vehicles through two separate dealerships.

Nissan was the only major auto company which had outsourced the marketing of the brand and the cars made under it. It tied up with Hover in 2008 to sell its vehicles across India, provide after-sales support and develop a network of dealers.

Hover was responsible for Nissan’s sales, service, parts, marketing, training and dealer development.

Hover, however, said, “Nissan does not have any legal basis for the termination of services of its national sales company.”

“It is premature to say any agreement regarding termination has occurred. Hover understands that Nissan wants to move quickly but it is possible only with the cooperation and consent of Hover and we look forward to working with Nissan and are hopeful of an amicable resolution,” the company said.

The first car to be sold by Nissan under this new sales model will be its small car Datsun Go.