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Posts Tagged ‘Original Equipment Manufacturer’

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Unique Issues in Retail Auto Joint Ventures

In a previous post (see: 2017 in Review: Trends in Retail Auto Mergers and Acquisitions), I highlighted the increasing prevalence of joint ventures (JVs) in the auto industry either as an approach to succession or as a way for individuals, family offices or investment entities who are new to the retail auto industry to get their start. Whatever the purpose of a JV, such partnerships are likely to encounter unique challenges in the retail auto space — challenges that partners do not commonly face in many other industries.

To be successful, all JVs, regardless of industry, require thoughtful planning and open discourse among the players. What is unique with JVs involving auto dealerships is that the interests of a third party — the vehicle manufacturer — must be considered. This is somewhat akin to the liquor industry or other industries where there is a “privileged license”Joint Venture ImageFor a retail auto Joint Venture to work well, the partners need to carefully think about and discuss