As a full-range business law firm, JunHe serves clients in many different industries. Clients from the automotive industry, which is the backbone of the national economy, are of great significance to JunHe. Since its commencement, JunHe has served several Chinese and foreign manufacturers and distributors of complete vehicles, as well as manufacturers of vehicle parts and components. Along with the opening up of China in recent years, new energy vehicles and smart cars have become a priority to Chinese automobile manufacturers. While continuing to serve traditional automobile brands, JunHe was appointed by a group of emerging vehicle and spare part businesses to advise on issues such as mergers and acquisitions, equity investments, listings and compliance, demonstration and establishment of innovative business models, supply chain management, product quality disputes, public opinion management, data management, intelligent driving, high-definition maps and export control. JunHe has accumulated abundant industrial and practical experience and keeps up to date with the evolving laws, regulations and policies in the industrial and market areas of the Chinese automotive industry. JunHe plans to expand its legal services in the automotive industry, especially those related to new energy vehicles and smart cars.
The global automotive sector continues to evolve with advances in electric cars, intelligent design and networking of vehicles. This provides the Chinese automobile industry with a precious opportunity to undergo transformation and upgrades, with the goal to advance China from being a large manufacturing power to a strong manufacturing power. The central and local authorities at all levels in China have reacted swiftly and positively to these changes, by gradually releasing restrictions on the proportion of foreign capital shares and the number of joint ventures, so as to enable a national treatment and fair competition to the foreign-invested automobile industry; continuously trying new systems in industry access and management, so as to address overcapacity and guide orderly investment; formulating a series of regulations on collection and use of automotive data and protection of personal privacy since a large amount of automotive data is involved as one of the characteristics of smart cars; continuously developing and updating various national and industrial standards related to smart cars, so as to promote the technology and product standardization; promulgating a series of regulations and policies to stimulate automobile consumption and protect fair competition and consumer rights; and promulgating a series of administrative rules regarding autonomous vehicles by central and local governments, so as to promote the research, development, testing and commercialization of intelligent driving vehicle. The relevant laws, regulations, and regulatory practices in China will continue to follow the ongoing changes of the automotive industry, and evolve.
In order to keep abreast with the evolution of the automobile industry and the rapid changes in the relevant laws and policies, legal advisers with understanding and keen insight in legislative developments are needed to ensure smooth transactions. JunHe has accumulated vast professional expertise and abundant experience in this industry and is providing new and existing clients with full-range legal services with respect to mergers and acquisitions, greenfield investments, joint ventures and cooperation. They are also adept at interpreting laws and policies, drafting and reviewing contracts, compliance reviews, legal risk prevention and professional training.
Recent Representative Cases
Listing of XPeng Motors in the U.S.A. and Hong Kong
With JunHe’s assistance, XPeng Motors completed its listing on the New York Stock Exchange (NYSE) and the main board of the Stock Exchange of Hong Kong (SHEK) on August 27, 2020, and July 7, 2021. With this listing, XPeng Motors became the first NEV manufacturer to list in both the U.S.A. and Hong Kong. XPeng Motors is a leading designer and manufacturer of smart electric vehicles and a technology company dedicated to the integration of frontier internet and AI innovative technologies. It has three main car models: G3, P7 and P5.
JunHe was appointed as the Chinese legal counsel for the co-sponsor and underwriter respectively in those listings. Although the schedule was tight and the market was suffering from the COVID-19 epidemic and other adverse factors, JunHe maintained its quality, rigorous and efficient work in serving its clients. The services it provided include assisting with the onshore legal due diligence, coordinating and participating in the physical visits and online interviews, reviewing and revising the prospectus and other application and IPO documents with respect to the listings, issuing Chinese legal opinions, and assisting in answering questions put forward by SEC and SHEK regarding Chinese laws. Finally, XPeng Motors successfully completed the listing on the NYSE and obtained approval and consent for its listing application from the SHEK.
Scania’s acquisition of a complete vehicle manufacturing base in China
In December 2020, Scania, a leading commercial vehicle manufacturer, acquired Nantong Gaokai Automobile Manufacturing Co., Ltd. and changed its name to Scania Manufacturing (China) Co., Ltd. Scania is the third largest heavy-duty vehicle manufacturer in the world, and is known as the “Mercedes-Benz and BMW of the heavy-duty truck industry”.
This was the first wholly foreign-owned commercial vehicle manufacturer in China after the decision by the Chinese government to allow a commercial vehicle manufacturer to be 100% owned by a foreign investor. It was created by a foreign investor purchasing the equity in a Chinese company. At the inception of the project, the Chinese government had not yet enforced the policy of releasing restrictions on the proportion of foreign capital shares. JunHe visited the Ministry of Industry and Information Technology (MIIT) and its local counterparts, the National Development and Reform Commission (NDRC) and other authorities with Scania again and again to consult on the feasibility of a foreign investor to buy out 100% of the equity in a local commercial vehicle manufacturing company. The project lasted for over a year from the beginning to the completion. While the project was still ongoing, the COVID-19 epidemic struck, resulting in the disconnection between the Scania’s headquarters and its China-based staff. JunHe and the transaction parties worked closely to drive the deal forward. JunHe’s team provided Scania headquarters with advice on the risks and uncertainties in the policy in relation to investment in a Chinese commercial vehicle manufacturing company, the transaction process pertaining to state-owned assets, and how to solve the inherited problems of the target company. Services provided by JunHe in the project include drafting and advising on the negotiation of dozens of transaction documents in relation to the acquisition of equity, green field investment and the restructuring of the target company, preparing all the documents for the sale and purchase of the state-owned equity at an equity exchange and for the change of the registered business particulars, and then translating all these documents into English.
NIO’s whole industry chain business
NIO is a new force in automobile manufacturing. As the Chinese legal counsel to NIO, JunHe has provided the company with all-round and full-chain legal services since its inception.
JunHe has provided legal services for NIO in its supply chain management and been involved in negotiations for OEM projects, the demonstration of the battery-swap model, the building of a user community, its import and export business, product quality disputes and product recalls. JunHe has provided advice regarding legal compliance and the establishment of rules for autonomous vehicles, automotive navigation and entertainment systems, the networking of vehicles, and cross-border information transmission.
BMW Brilliance’s shareholding structure adjustment
As part of China’s opening-up policy, restrictions on foreign investment in the automotive industry have been lifted. JunHe represented Brilliance Group in its negotiations with BMW throughout its shareholding structure adjustment and successfully assisted Brilliance Group in reaching its various arrangements related to shareholding structure adjustment. The project was completed in early 2022