CCS consults on Nissan acquiring shares in Mitsubishi Motors

A businessman walks past logos of Japan's auto giant Nissan Motor at the headquarters in Yokohama on Nov 7, 2016.
A businessman walks past logos of Japan's auto giant Nissan Motor at the headquarters in Yokohama on Nov 7, 2016.PHOTO: AFP

SINGAPORE - The Competition Commission of Singapore (CCS) is conducting a public consultation over the next two weeks to solicit feedback on the acquisition of shares in Mitsubishi Motors Corporation by Nissan Motor.

Nissan, which is an affliate of Renault, bought a 34 per cent stake in Mitsubishi Motors Corporation for 237 billion yen (S$3.2 billion) in October.

It said in a statement on Friday (Dec 2) that both companies have jointly applied for a decision by CCS on whether the acquisition has infringed the prohibition in the Competition Act against anti-competitive mergers.

Section 54 of the Competition Act prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition in Singapore.

CCS said it understands that Nissan, Mitsubishi Motors Corporation and Renault "are each active worldwide in the development, manufacture, marketing and sale of passenger vehicles, commercial vehicles, components, and spare parts and vehicle financing (for their own vehicles)".

According to Nissan and Mitsubishi Motors Corporation, there is significant competition for the supply of passenger vehicles and light commercial vehicles, and this competition remains post-acquisition.

The CCS said the two firms also noted that it is very difficult for competitors to coordinate their competitive behaviour after the acquisition as "competition in passenger and light commercial vehicles is fierce and driven by numerous price and no n-price factors, as well as end-customers' purchase considerations".

They added that apart from supplying passenger vehicles and light commercial vehicles in Singapore, Renault, Nissan and Mitsubishi Motors Corporation do not overlap or potentially compete in other goods or services in Singapore.

More information on the public consultation can be accessed from the CCS website.

The closing date for feedback submission is on Dec 16.