The Automotive Sector

The automotive industry...

We're all familiar with the automotive industry! Cars are quite literally all around us. You can rarely go down a street without at least one car being parked! Therefore unsurprisingly, the UK automotive industry is a huge and integral part of the UK economy, being worth more than £82 billion in turnover and adding a whopping £18.6 billion value to the UK economy! 

Interesting automotive facts taken from smmt.co.uk: 

  • 168,000 people are employed in car manufacturing 

  • 823,000 plus people are employed in the wider automotive industry 

  • 8 out of 10 cars produced in the UK are exported overseas to 160 different markets globally and the industry accounts for 14.4% of the total UK export of goods (worth £44 billion). 

Law firms that specialise in the automotive industry will have industry specialist lawyers who are able to combine their in-depth automotive sector knowledge and legal expertise to ensure clients receive the highest quality service and advice.  

What do the lawyers do?!

The automotive industry is subject to a range of legal issues and challenges. Innovation and regulatory changes mean those in the automotive industry need to be one step ahead of competitors. So how can the lawyers in the industry help?

 

Lawyers that specialise in this sector will (amongst other things):

 

  • prepare commercial contracts such as supply contracts, development contracts, distribution agreements, software and technology contracts

  • preparing trade parts agency agreements

  • dealing with the litigation around product safety and liability matters (i.e. warranty, recalls and field actions)

  • advise and draft legal documents regarding intellectual property protection 

  • prepare and negotiate the legal documents in connection with finance transactions such as funding finance, intra-group lending, finance and security arrangements 

  • draft and negotiate investment and strategic partnership arrangements (that's when two businesses in the industry want to work together on a particular project) 

  • advise and deal with mergers and acquisitions of businesses that operate within the sector 

  • advise on all implications of competition law on the automotive industry including cartels, abuse of dominance and merger control and more particularly, the distribution of motor vehicles and their after-sale service under EU competition law

  • advise on importing and exporting of cars and parts 

  • dealing with environmental and regulatory matters. 

The above types of legal work are non-contentious - that means they are very much transactional in nature and will be quite document heavy. Although there'll be some negotiations on agreeing the right terms for all parties to the relevant agreement, generally both sides want the same end result

The automotive industry can also have contentious elements (like most other industries as it's very rare to have a business or sector that doesn't involve some form of dispute!). Contentious is dispute and litigation work and examples of this work in the sector include disputes arising from:

  • car (or parts) manufacturer's liability

  • the supply of goods and services 

  • health and safety

  • regulation

  • trade descriptions

  • warranty restitution

  • business recovery 

  • defamation 

Clients in this sector...

Clients will include:

  • manufacturers 

  • dealerships

  • suppliers

  • insurance providers

  • roadside recovery businesses 

  • parts distributors

  • motor racing organisations

  • private clients

Example legal cases

Furley Page saved a local dealership hundreds of thousands of pounds in successfully negotiating the settlement of a dispute in respect of the supply of used vehicles. 

Winston obtained a key ruling for Hyundai Motor Company for the dismissal of a consumer class action claiming unfair trade practices. 

Gowling WLG represented Ford Motor Company on the sale of the Formula 1 team that became Red Bull Racing. 

Law firms to consider...