The Competition Commission of Singapore (CCS) has given the nod to Nissan Motor's recent acquisition of a 34 per cent stake in Mitsubishi Motors.
The CCS found that the deal will not substantially reduce competition in the market here. It advised the two firms of the decision on Jan 23.
Nissan - an affiliate of French car firm Renault and Japan's second-largest carmaker by sales - bought the controlling stake in Mitsubishi for 237 billion yen (S$3.2 billion) in October last year.
The move is to help the smaller Mitsubishi turn its business around from a fuel-economy scandal, after it admitted last April that it had been cheating on fuel tests for years.
The CCS said in a statement yesterday that it had sought feedback from customers, distributors and other vehicle manufacturers, who had not raised competition concerns on the wholesale supply of cars and pickup trucks here.
After reviewing the feedback, the CCS concluded that the transaction would not result in a substantial lessening of competition in the relevant markets- those for mini cars, small cars, medium-sized cars, sports utility vehicles and pickup trucks.
The CCS said that as a result, the deal has not infringed Section 54 of the Competition Act, which prohibits mergers resulting in a substantial lessening of competition.
This is for mergers where the merged entity will have a market share of 40 per cent or more, or a market share of 20 per cent to 40 per cent when the post-merger combined market share of the three largest firms is 70 per cent or more.
The combined market shares of Nissan, Renault and Mitsubishi for passenger vehicles did not exceed the commission's indicative thresholds for competition concerns, said the CCS, adding that the firms are not "close competitors" in the market.
For pickup trucks, the merger would result in a 60 per cent to 70 per cent combined market share of the three firms, and a 90 per cent to 100 per cent share for the three largest players.
But the CCS also said market share figures may not be a reliable indicator of competition, noting that there is a "considerable degree of volatility" in the market shares of the three companies and their competitors, as well as "sufficient competition" from other major suppliers of pickup trucks.
It added that barriers to expansion and entry are not "overly high" for the supply of passenger and light commercial vehicles.
"New brands of passenger vehicles have entered Singapore in recent years, and there would be little cost for an existing manufacturer that already supplies passenger vehicles in Singapore to supply light commercial vehicles as the manufacturer can tap its existing passenger vehicle distribution network."
Separately, the CCS is seeking public feedback on a proposed joint venture between Nippon Yusen Kabushiki Kaisha, Mitsui O.S.K. Lines and Kawasaki Kisen Kaisha.
The three Japanese shipping lines said last October that they plan to merge their container shipping businesses. The only overlapping service of the firms in the proposed joint venture which would affect Singapore is container liner shipping services.
More information on the public consultation can be accessed from the CCS website. The closing date for submissions is Feb 20.