Automotive Case Study: Investment Consideration for a Private Equity Firm

A New York-based global private equity firm asked us to evaluate their investment in an automotive specialty retail indirect lender. This lender had flourished during the few years after the financial crisis of 2008-2009 by financing certain categories of borrowers with blemished credit histories. The private equity firm was considering two different strategies: 1) divest itself of the investment; or 2) double down on its investment by making an additional investment in a chain of used car stores that was one of the primary originators of loans for the lender.

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Automotive Case Study: Expert Witness Services for an Automobile Manufacturer

We were retained by a major U.S.-based international law firm to provide an expert report and testimony on behalf of its client, a rapidly growing foreign automaker (“OEM”). The client had been sued by its U.S. distributor for specific performance, breach of confidentiality, and uncompensated benefit as part of a joint venture effort.  Our task was defined as to determine whether or not the distributor’s product plan and specifications were achievable and sound; whether or not third party reports and studies prepared for the distributor were realistic; whether or not the distributor’s information were deemed to be trade secrets; and whether or not the OEM derived value in terms of public relations benefit from the efforts of the distributor.

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Automotive Case Study: Industry Analysis for NADA

Faced with pressure from a growing chorus of government agencies (e.g. Federal Trade Commission, Department of Justice), certain economic academics, some consumer advocates, and one highly visible automaker all suggesting that the dealer franchise system was a relic from the past and only added costs to the distribution and sales of new vehicles, NADA determined that it needed a “White Paper” to demonstrate the consumer benefits of the franchise retail system. In 2013, we were asked by NADA to produce such a document which was published in early 2014.

Although the dealer system (and its precursors) had been existence for nearly 100 years, going through periodic cycles of expansion and more recently significant downsizing, the existence of franchised dealers largely remained anchored as the distribution/sales/service model despite constant attempts to undermine or discredit the dealer system. The advent of the Internet which created new pathways for sales of many products, yet new vehicle sales remained within the province of the dealers in all 50 states and to some degree protected from manufacturer competition by various state laws. (The laws were mostly designed to protect local dealer businesses from unfair or predatory practices of their much larger and financial capable OEMs.) Various groups now sought to eliminate or modify dealer franchise laws to allow direct manufacturer sales everywhere.

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Automotive Case Study: Trade & Investment Strategy for a Foreign Government

Our client sought to understand and address its ability to procure foreign direct investment for new automotive assembly and technical center investments. We were retained, over a period of several years, to provide the industry and trade office of a foreign government with insight and analysis as to potential investors (i.e. automobile OEMs), how other governments (particularly select southern US States and Mexico) had obtained such investments, and what steps it should take in order to gain consideration for new investments.

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