SINGAPORE - The Competition Commission of Singapore (CCS) has approved the acquisition of a 34 per cent stake in Mitsubishi Motors Corporation by Nissan Motor, an affiliate of French firm Renault.
In a statement on Monday (Feb 6), the commission said feedback received from customers, distributors and other vehicle manufacturers had not raised competition concerns on the wholesale supply of cars and pick-up trucks here.
"After reviewing the parties' submissions and the feedback received, CCS concluded that the transaction has not resulted in a substantial lessening of competition in the relevant markets, and therefore has not infringed section 54 of the Competition Act (Cap. 50B)," said the CCS, adding that its decision for the transaction was issued on Jan 23.
Under Section 54 of the Competition Act, mergers that have resulted or may be expected to result in a substantial lessening of competition are prohibited.
This is for mergers where the merged entity will have a market share of 40 per cent or more, or a market share of between 20 per cent and 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 pick-up trucks, the merger would result in a 60-70 per cent combined market share of the three firms, as well as a 90 - 100 per cent share for the three largest players.
However, the CCS said market share figures may not be a reliable indicator of competition, noting there is a "considerable degree of volatility" in the market shares of the three firms and their competitors, as well as "sufficient competition" from other major suppliers of pick-up 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 on its existing passenger vehicle distribution network."