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Ahead of the Curve Auto Supplier Blog

November 16, 2017

Dyson’s entrance into the auto industry is a reminder that change is coming

Recently, news broke that British vacuum manufacturing giant Dyson is entering the automotive industry. The company synonymous with upscale vacuum cleaners announced that it was making a multi-billion dollar investment in an effort to develop an electric car by 2020. Other than stating that the vehicle would be battery-powered and “premium,” little is known about what Dyson’s foray into the automotive industry will ultimately look like. But regardless of Dyson’s end product, this newcomer to the industry is yet another reminder that technology-driven disruption is here to stay.
 
Just as with the increased focus on autonomous vehicles, new entrants into the automotive market—especially technology-focused businesses—are another sign of the continuous change affecting the auto industry. Automotive suppliers should take notice and take stock of their strategy to weather, and hopefully capitalize, on these changes. Ask any member of a technology-dominated market—change is constant, and companies must adapt to new challenges and technologies in quicker and smarter ways.
 
For example, new technology-savvy customers and suppliers could shift risk in ways that your current contractual safeguards may not be equipped to handle. Automotive suppliers should think about whether their traditional approach to concerns like warranty risks, indemnification clauses, and root-cause analyses needs a fresh look. This concern also applies to technology companies making their first foray into the automotive industry. Automotive contracts and best practices are unique, but there are steps newcomers can take to limit the risk from this unknown territory.
 
Change is not only being driven by new market entrants—current auto suppliers are making moves to adapt their own business technologies and increase automation to keep up and stand out. This can bring exciting opportunities, but also new pitfalls and hazards that might be unfamiliar to less technology-focused suppliers. For example, intellectual property (IP) protection—which may not traditionally have been important for some automotive suppliers—is likely to play an increased role in the near future. The increased use of technology also brings with it a heightened need to protect that technology, whether it is yours or it belongs to a customer.
 
Identifying your own business’ changing needs in a rapidly evolving automotive industry and then adapting to meet those needs can be challenging. The Warner Norcross Automotive Industry Group attorneys have expertise in supply chain contracting, intellectual property, warranty and recall, and other critical areas to help you be prepared for what’s to come. Contact us to discuss these or any other concerns related to your automotive business and watch this space for other updates and tips.

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