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Dual distribution in automotive: Competition law risks and national approaches
This newsletter is the final entry in our three-part series on the legal aspects of transitioning to the agency model (where dealers become “agents” making sales on behalf of manufacturers) within the EU automotive sales sector. The first part focused primarily on the basic parameters of agency models and on the issues surrounding the termination of existing contractual agreements. The second newsletter focused on agency models in relation to consumers, outlining the key obligations and risks for manufacturers and agents. In this entry, we examine the competition law risks associated with both the agency and dual distribution (selling vehicles both through independent authorized dealers and directly to end-consumers)
Kinstellar advises Cresco on the acquisition of a major residential development project in Prague’s Žižkov district
Kinstellar has successfully advised Cresco on the acquisition of a residential development project in Prague from Finep. The site, located in the former freight railway station area in Žižkov, is set to host over 1,000 new residential units. The transaction was carried out in partnership with WOOD & Company, marking a significant step in the ongoing transformation of the brownfield site into a vibrant urban neighbourhood. Kinstellar provided comprehensive legal support to Cresco throughout the acquisition process, including legal due diligence, transaction structuring, financing matters, and negotiation support. The acquisition forms part of Cresco’s broader strategy to expand its presence in the Czech
Alternative distribution models in the automotive sector: Consumer protections and liabilities
Alternative distribution models based on direct sales to consumers can be carried out with the varied involvement of traditional dealers. This means, among other things, producers taking on a significant number of consumer law obligations previously borne by dealers. In any event, the actual liability of producers in relation to direct sales depends on the respective contractual terms between manufacturers and agents. For example, in Austria, the differing contractual terms between a producer and agent, and an agent and customer, can lead to the following scenarios: a) a commercial agent selling vehicles in the name of the manufacturer while the manufacturer as the seller remains fully liable in terms of contractual
Transitioning to an agency model in automotive sales: The pros and cons from a legal perspective
The automotive industry is entering a new era – not only in terms of technology and electromobility but also in terms of how vehicles are sold. Certain manufacturers are shifting away from the traditional dealership model towards alternative sales models, such as agency system, while many others remain wary about the viability of such alternatives. Traditionally, manufacturers would sell cars through dealerships, who acted both as buyers and as agents. Dealers would typically purchase vehicles, hold inventory, and then sell cars to customers, earning profits from sales margins and commissions. Under the new agency model, dealers will act as sales agents directly for manufacturers. They will thus no longer purchase