The Competition Commission of Singapore (CCS) has cleared Nissan Motor’s acquisition of a 34 percent shareholding in its rival Mitsubishi Motors, the competition watchdog said on its media release.
The media release on 6 February informed CCS had issued its clearance decision for the transaction to the two companies on 23 Jan 2017.
In October last year, Nissan had acquired a 34 percent controlling stake in Mitsubishi.
CCS said it had sought feedback from end-customers, distributors, and other vehicle manufacturers and none of the feedback received raised competition concerns with the Transaction.
CCS concluded that the transaction had not resulted in a substantial lessening of competition in the Relevant Markets (RM): the market for the wholesale supply of mini cars, small cars, medium cars, sports utility vehicles,and pick-up trucks in Singapore.
The two companies’ combined market shares for passenger vehicles do not exceed 40 percent of any of the RM, a threshold used by CCS to evaluate whether the merger could raise competition concerns or not.
Although they do exceed the threshold for light commercial vehicles such as vans, mini-vans and pick-ups, with combined market shares of 60 to 70 percent after the acquisition, CCS noted that the market share figures may not be a reliable indicator of competition in the market for pick-up trucks.
“There is considerable degree of volatility in the market shares of both the parties and their competitors, and there is sufficient competition from other major suppliers of pick-up trucks in Singapore,” CCS said.
The statement also said that barriers to expansion and entry are not overly high in the RM or broader markets in relation to 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,” it said.
Under the Competition Act, CCS can issue directions to promote and sustain competition in markets in Singapore .