Hover gears up for Nissan onslaught

The car launched in three variants – XE, XL and XV – last July does not have an automatic but given this strong feedback, an automatic is on the anvil, said Abhijeet Pandit, vice-president, sales, marketing and aftersales, Hover Automotive India.

Nissan Motor India sells its Micra through Hover Automotive which is its global marketing partner. While Nissan does so in all markets where it has a presence, this is the first time for an automotive player in India that such an arrangement has been introduced.

Pandit, a veteran of the retail business who spent years with the Infinity dealership in Europe, now spearheads the initiative. Nissan Motor India plans to set up 36 outlets by the end of this fiscal and 100 by 2013. Moreover, the company plans to roll out nine models of which five will be locally produced. Clearly, the company has to have a widespread and fully-capable dealerships up and running.

In recent months, it has set up dealerships at a breathtaking pace in places as far as Bhubhaneswar in Orissa and Vijaywada in Andhra Pradesh. What has all this meant for the Hover Automotive India? For one, the company has had its hands full trying to appoint dealers with the right experience but this has not been easy. Pandit says categorically, “Being last among players that have entered India, the best potential dealers have already been chosen by other companies.” He adds that given that Nissan is fighting entrenched brands has added to the challenge. Unlike other Japanese players, Maruti is in the top slot and people know Toyota, which is gearing up for its own small car launch. Clearly, Hover has its task cut out.

INTERVIEW Abhijeet Pandit, VP - sales, marketing & aftersales, Hover Automotive India

Given that Hover has had to set up so many dealerships in a record time, what challenges have you faced?

It has a major challenge getting a partner and also fighting several entrenched brands. While we prefer to get a dealer with automotive experience or background, it’s not been easy. We have, therefore, had to get dealers from other industries like hospitality. But this has not been an advantage. We have had players who don’t come with any baggage and after the training they have received, they have indeed, shaped up well.

How did Hover Automotive ramp up?

We have set procedures for appointing dealers. What matters is not just experience but financial capability and having the right location, to mention a few. Once we take a call, there is no ambiguity. We go right ahead even if a candidate is not from the automotive sector. We start out by agreeing on a time plan and we work closely with our upcoming dealers in terms of monitoring their progress on a weekly basis and in turn they work with our list of suppliers for obtaining the right equipment.

What challenges have you faced on the staffing front?

Yes, we face an issue with high attrition rates. The jobs available are many but candidates to staff them are not adequately qualified. It has been hard to get people and retain them. If I might say so, we have had to overstaff and that adds to costs but none of our dealers is complaining.

What about training?

We have invested in training for sales, product, aftersales and body and paint. We have reached a tie-up with Raytheon Training Services. On the whole, we provide 10 days of of training per month. We are very sure that this is a corporate role and that we are establishing a brand. We pay industry standards as well.

Given the delays in delivery, how are you planning to handle Diwali sales? We hope to get the waiting period down from two months to a week or so by end-October. When we launched, we expected the top-level variant to account for 25 percent of sales but it actually turned out to be 65 percent. So we had to change production schedules and given that the top-level variant has some imported parts, we had to negotiate with suppliers and so on so forth. Overall, our communication is directed at the top level and we want to cater to serious buyers. We have worked on this and will have availability down to a week ahead of the festive season.

What are your plans for Diwali?

We will have a strong campaign going and that will go on till the mid-November. We have been rather subdued all along now so as not to create high demand. Having said that, our media campaign will also include radio FM and an online campaign.

Any reactions to your choice of Ranbir Kapoor as brand ambassador? We need an ambassador in order to create awareness. His association with the Micra has been a point of recall. Our dipstick survey in many cities shown that Ranbir is recognised.

It has worked for us especially in the North and West; in Hyderabad too but less in the south. The proliferation of Indian satellite channels has certainly helped. The north contributes an estimated 35 percent of total volumes and that was as we had anticipated.

What has been the impact of real estate costs in setting up dealerships? Apart from finance, a potential dealer must must find the right location. Pricing in Mumbai is tough and that is why our Navi Mumbai outlet needed time. But there are other challenges like obtaining government approvals and bureaucracy.

How did you handle the challenge for high realty costs?

We have had to relocate in some cases and compromise on space in some places. The bottomline is that we have had to be flexible. From our overseas experience, we do have small Infinity dealerships but that does not mean they cannot be effective.

What is the feedback as regards automatics?

As I said, we never quite anticipated this. Our competition – the Swift – does not have an automatic version and the i20 which has sold in small numbers but apparently going up. Judging from our feedback, 10-15 percent could have been for automatics from the metros and from cities like Mohali, Chandigarh, Jalandhar and some in the South. So we are pushing for an automatic.

What explains the feedback on automatics?

It is a combination of congestion in small cities and rising expectations. Buyers want something that is available abroad. Women want an automatic; it is easier to park.Small cars have sensors today so expectations are high, easy funding helps all the more.

Who is a typical Micra buyer?

He is one who is fairly well educated, a graduate, more likely a post-graduate, has a small family and his wife works. So double income. He has high expectations, likes the latest and wants, for example, to know how to connect his iPod. He is essentially a person of good taste.

What feedback have you got from Facebook?

Since the sheer number of bookings took us by surprise, some feedback was negative in the sense that people didn’t want to wait. We do send dealer feedback summarised to Japan and they have been surprised by the expectations of the Indian buyer.

Given the Hover Group’s own heritage in hospitality and retailing, what did it bring to bear on the Indian arm?

We have brought in strong processes into the business. Our exposure to developed markets has helped us as also our marketing experience.

Caption for pix: Nissan Motor India and Hover Automotive India have an aggressive plan to set up dealerships across the country.