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(i) The names of the merger parties:
- Nissan Motor Co., Ltd. (“Nissan”), which is an affiliate of Renault SA (“Renault”) pursuant to an alliance entered into between Renault and Nissan in 1999; and
- Mitsubishi Motors Corporation (“MMC”),
(collectively, the "Parties")
(ii) A description of the transaction:
This joint notification by Nissan and MMC relates to the transaction entered into between Nissan and MMC under the agreement dated 12 May 2016 (the “Basic Agreement”) and the agreement dated 25 May 2016 (the “Strategic Alliance Agreement”) for a strategic alliance between Nissan and MMC (the “Transaction”). As a result of the Transaction, Nissan has acquired a 34 per cent shareholding in MMC such that MMC will become an affiliate of Nissan, and Nissan has acquired sole control over MMC within the meaning of control under the Competition Act.
(ii) A description of the business activities of the merger parties worldwide and in Singapore:
Nissan, Renault, and MMC are each active worldwide in the development, manufacture, marketing and sale of passenger vehicles, light commercial vehicles, components and spare parts. While the Parties provide vehicle financing services in other countries, none of the Parties provide vehicle financing in Singapore.
(iv) A description of the overlapping goods or services, including brand names:
Nissan (together with Renault) and MMC overlap only in the supply of passenger vehicles and light commercial vehicles in Singapore.
(v) A description of substitute goods or services:
The substitute goods to the Parties’ overlapping products are passenger vehicles and light commercial vehicles manufactured by other manufacturers.
(vi) The applicant’s views on:
a. the definition of the relevant market(s);
The Parties submit that the relevant markets for the purposes of this notification are:
b. the way in which competition functions in this market;
The Parties submit that automotive manufacturers compete globally on a range of factors, which end-customers take into consideration in their choice of passenger vehicles and/or light commercial vehicles in Singapore. Such factors include price, quality, image, reputation, innovation and vehicle features.
c. barriers to entry and countervailing buyer power; and
There are low barriers to entry for vehicle manufacturers to enter Singapore. There would be little to no cost for a manufacturer that already supplies certain vehicles (e.g., passenger vehicles) in Singapore to supply additional models (e.g., light commercial vehicles).
There is countervailing buyer power from end-customers who typically consider multiple brands and change regularly from manufacturer to manufacturer. For distributors, the costs involved in switching from one vehicle manufacturer to another are generally not prohibitive. For consumers, the switching costs are negligible.
d. the competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant).
Non-coordinated effects
The Parties submit that non-coordinated effects will not arise in the supply of passenger vehicles and the supply of light commercial vehicles as a result of the Transaction because there is significant competition for the supply of passenger vehicles and light commercial vehicles, and this competition will remain post-Transaction.
Coordinated effects
The Parties submit that the characteristics of the relevant markets preclude the possibility of anti-competitive coordinated effects, as competition in passenger and light commercial vehicles is fierce and is driven by numerous price and non-price factors and end-customers’ purchase considerations, such as quality, image, reputation, innovation and vehicle features, and it would accordingly be very difficult for competitors to coordinate their competitive behaviour.
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