Japanese auto firm Nissan today terminated its sales, marketing and distribution agreement with Hover Automotive India, which disputed the move, saying the action had no legal basis and the pact was still intact.
While Nissan said it would henceforth go alone in selling its vehicles in India, Hover Automotive India (HAI) said it would "pursue the necessary course of action to protect interests of its employees and stakeholders."
Nissan Motor India Private Ltd (NMIPL), the Japanese company's local subsidiary, has assumed full responsibility for the sales, marketing and distribution of all Nissan-branded vehicles and parts in India, with immediate effect from February 14, Nissan said in a statement, without specifying any reasons.
It said the "agreement with Hover Automotive India Pvt Ltd for exclusive sales, marketing and distribution of Nissan branded vehicles and parts in India has been terminated."
"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.
Details of the business structure will be announced in due course, the company said.
The HAI management took strong exception to Nissan's announcement. HAI reserves all rights and remedies available and will pursue the necessary course of action to protect the interests of its employees and stakeholders, it said.
"Nissan does not have any legal basis for the termination of services of its national sales company, Hover Automotive India Pvt Ltd in India," HAI said.
Claiming that negotiations with Nissan are ongoing, HAI said, "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," the company added.
Nissan, which currently sells models such as the Sunny, Micra and Terrano in India, said in November that its Datsun vehicles would be sold directly through Nissan Motor in India and not through Hover.