Hover Automotive to end its journey in India

With the end of partnership with Nissan Motor India, the former sales and distribution partner Hover Automotive India (HAI), ends its journey in less than two months after the partnership formally ended. Hover's operations ending in India can be seen as the failure of the concept of master franchisee that didn't worked well in India.

On 17th February, after six years long collaboration, Nissan terminated its sales and distribution agreement with Hover. However, the decision didn't go well with Hover, which issued a public notice that stated Nissan's action as “ineffective”. Nissan's spokesperson said via e-mail, “Due to the sensitive nature of this matter we have no further comment on Hover Automotive India.” Meanwhile, HAI spokesperson reponded via e-mail, “The legal proceedings are under way and the matter is subjudice. We are bound by the confidentiality clause and therefore cannot comment at this stage.”

Except Nissa, there's no other automobile company in India that operates on the basis on master franchisee concept. All other companies have appointed dealers to carry out this job. However, Nissan felt the need of a partner to understand Indian market better, and ramp up quickly. This led to the existence of HAI- partnership between Hover and Nissan India.

Commenting over this, Puneet Gupta, associate director at IHS Automotive and automotive forecasting firm said, “Unless there are multi brand dealerships, the concept of a master franchisee does not work. Because as a distributor of a single manufacturer, Hover was just adding another layer and eating up margin on the product, which was already low to start with. That did not go down well with dealers who had invested heavily in the business.”