Linklaters

Many car makers are seeing a change to their business model, as refinancing becomes more expensive. This has reduced the opportunity to use cheap leasing arrangements to subsidise sales. The decline in new car sales has also affected the value of used cars and the stock of cars returned to companies after leasing arrangements expire. Both factors are reflected in balance sheets. Banks to the automotive industry need to reconsider their products and look to opportunities for help from state aid programmes.

More alliances and joint ventures between automotive companies are likely in the future, as the industry attempts to develop cleaner engine technology and to reduce its environmental impact. Such alliances require careful consideration of relevant legal issues.

Linklaters combines acknowledged global expertise in joint ventures with experience of the most important concerns of the automotive industry. These include corporate governance - the balance between keeping a joint venture operational and ensuring that neither party can dominate the other. Another crucial consideration is intellectual property, including cross-licences, the development of IP, rights to newly developed IP and how they can be leveraged, perhaps by sale to a third party.

The current global economy makes employment law a key concern for car makers. In tough market conditions, Linklaters’ ability to negotiate effectively with strong unions gives clients a significant competitive advantage. The emphasis will be on keeping plants running. Here, Linklaters’ cross-border corporate restructuring & insolvency expertise is an invaluable resource when the insolvency of a single component supplier can cause problems for the entire production chain. The firm’s insight into the various insolvency regimes across Europe, the Americas and Asia helps clients to navigate this issue and to find practical, robust approaches to safeguard the production chain.

Contact us

To discuss legal issues with Linklaters’ global automotive team, please contact sector leaders Rüdiger Thiele, Stephan Oppenhoff or Edward Hickman.

You can find out more about Linklaters’ automotive capabilities from sector manager Paul Chaggar on (49 211) 2297 7820

Recent automotive transactions include advising:

• Daimler AG on its acquisition of a 25% stake in Tognum AG
• Volkswagen AG on various matters involving the Supervisory Board
• TMD Friction Group on restructuring alternatives, insolvency filing duties and, following its filing for insolvency, the insolvency administrator on the disposal of the assets
• Troika Dialog on the sale of a 10 per cent stake in Kamaz, Russia’s largest truck manufacturer, to Daimler AG
• Ford-Werke GmbH on a comprehensive restructuring, including transition from AG to GmbH and a €5.3 billion recapitalisation
• BMW Group on building up its own distribution network and financial services business throughout Central and Eastern Europe
• PSA Peugeot Citroën, Ford and Renault on a shareholders’ agreement relating to a joint venture to develop telematics services in Europe
• AB Volvo on the sale and transfer of Volvo’s shares in Mitsubishi Motor Corporation and the assignment of a Master Alliance between Volvo and Mitsubishi Motor Corporation, as well as certain development and distribution agreements with DaimlerChrysler AG
• Inchcape, a London Stock Exchange listed automotive retailer and Europe’s third largest, on its acquisition of 75 per cent of Musa Motors in Russia, with agreement for its deferred acquisition of the remaining 25 per cent. Deal value is up to U.S.$700 million