EUROPEAN COMMISSION DG Competition

Only the English text is available and authentic.

REGULATION (EC) No 139/2004 MERGER PROCEDURE

Article 6(1)(b) NON-OPPOSITION Date: 05/07/2017

In electronic form on the EUR-Lex website under document number 32017M8449

EUROPEAN COMMISSION

Brussels, 5.7.2017 C(2017) 4857 final

In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC) No 139/2004 concerning non-disclosure of business secrets and other confidential information. The omissions are shown thus […]. Where possible the information omitted has been replaced by ranges of figures or a general description.

PUBLIC VERSION

To the notifying party

Dear Sir or Madam,

(1) On 30.05.2017, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which the undertaking Peugeot S.A. ("PSA" of France) acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole control over the automotive business of Opel/Vauxhall ("Opel") by way of purchase of shares and assets 3 (hereafter, the "Transaction").PSA is designated hereinafter as the "Notifying Party" and together with Opel as the "Parties".

1. THE PARTIES

(1) PSA is active worldwide in manufacturing and supplying passenger cars and light commercial vehicles ("LCVs") under the Peugeot, Citroën and DS brands.

1 OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the European Union ('TFEU') has introduced certain changes, such as the replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The terminology of the TFEU will be used throughout this decision. 2 OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement'). 3 Publication in the Official Journal of the European Union No C 179, 07.06.2017, p. 8.

Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË

Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.

Through its subsidiary, Faurecia S.A., it is also active in the manufacturing and supply of interior automotive components.

(2) Opel is currently controlled by General Motors Company ("GM", the USA) and consists of GM's European automotive business under the Opel and Vauxhall 4brands. Opel manufactures and supplies passenger cars and LCVs.

2. THE OPERATION

(3) The "Transaction" consists of the acquisition of all assets and shareholdings related to Opel. As a result, PSA will solely control Opel. The Transaction therefore constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

3. EU DIMENSION

(4) The undertakings concerned have a combined aggregate world-wide turnover of 5 more than EUR 5,000 million.Each of them has an EU-wide turnover in excess of EUR 250 million, but they do not achieve more than two-thirds of their aggregate EU-wide turnover within one and the same Member State.

(5) The notified operation therefore has an EU dimension under Article 1(2) of the Merger Regulation.

4. RELEVANT MARKETS

4.1. Manufacturing and supply of passenger cars and LCVs

(6) The Commission has in the past considered separate markets for the manufacturing and supply of passenger cars on the one hand, and of commercial 6 vehicles on the other hand.The Notifying Party agrees with this distinction which is retained for the present case.

4.1.1. Product market definition

4.1.1.1. Passenger cars

The Notifying Party's view

7 (7) The Notifying Party agrees with the Commission's decisional practicedefining separate product markets for (i) mini cars, (ii) small cars, (iii) medium cars (iv)

large cars, (v) executive cars, (vi) luxury cars (vii) sport cars, (viii) sport utility vehicles ("SUVs") and (ix) multipurpose vehicles. However, it submits that the boundaries between different vehicle categories are not always clear-cut both in 8terms of intended use and price.

(8) With regard to the further sub-segmentation of SUVs based on the size of the car, the Notifying Party submits that given the recent development of the segment it sees no clear distinction between the sub-segments, therefore it considers that analysing the SUV segment as a whole provides a more relevant and accurate 9picture of the competitive environment.

(9) Furthermore, the Notifying Party considers that electric vehicles do not constitute a separate product market as electric and hybrid powertrains – as opposed to combustion engines – are available for the majority of the car models, therefore consumers can choose the electric version as an option for the preferred car 10model.

(10) As for the geographic scope of these markets, the Notifying Party submits that it is EEA-wide in scope as production of vehicles takes place on an international level and the competitive conditions are largely homogeneous throughout the 11EEA.

The Commission's assessment

(11) The Commission's previous segmentation as set out in paragraph (7) was confirmed by the results of the market investigation. Indeed the majority of 12 13 competitorsand customersindicated that this segmentation is appropriate with regard to passenger cars.

(12) The Commission has previously considered the further sub-segmentation of the SUV segment into (i) small, (ii) medium and (iii) large SUVs but ultimately left 14the question open.

(13) The respondents to the market investigation in the present case confirmed that such sub-segmentation is appropriate. However it has to be noted that only a 15 slight majority of competitorsagreed with this categorization. Others argued that no sub-segmentation is needed as "[t]he differences on price, quality/features and intended use are not significant from one sub-segment to another to justify further segmentation of the SUV segment. A customer could easily substitute all

16 the models comprised within the SUV segment."On the other hand, the great majority of customers replied that there are differences – for example with regard to age, lifestyle or income - in the target customers of the SUVs in different sub- 17segments.

(14) The Commission investigated in the present case whether electric cars constitute a separate product market and whether this possible market should be further segmented according to (i) technology (electric battery cars and hybrid cars) or (ii) the categories defined for vehicles with combustion engines (see paragraph (7)).

(15) The results of the market investigation are somewhat inconclusive in this regard. While the majority of competitors submitted that electric cars do not constitute a 18 separate product market,most of them distinguish between battery electric and hybrid vehicles. However, as a competitor indicated "[s]ome HEVS (Hybrid Electric Cars) are more aligned with BEVs (Battery Electric Vehicles) whilst others are closer to ICE (Internal Combustion Engine). This alignment depends 19on the actual functions, systems and performance […]"

(16) As regards hybrid vehicles, several competitors indicated that these – already now 20 – compete directly with combustion engine powered models.As for the battery electric models, competitors indicated that they would become an alternative 21 powertrain choice in 2-5 years.Customers emphasised the price difference between electric cars and combustion engine powered cars and added that currently the capacity of the batteries and the lack of charging infrastructure limit 22 the use of battery electric cars.It was mentioned both by customers and competitors that specific national legislations - such as the tax exemptions in 23Norway - can significantly influence the competitiveness of electric cars.

4.1.1.2. LCVs

The Notifying Party's view

24 (17) The Notifying Party agrees with the Commission's decisional practice in 25distinguishing (i) light, (ii) medium-size and (iii) heavy commercial vehicles.

(18) The Notifying Party submits that the relevant market encompasses all LCVs under 6 tons but a plausible market segment could be found within this market, 26comprising vehicles from 0 to 3.5 tons.

(19) With regard to pick-up trucks, the Notifying Party is of the opinion that they 27belong to the LCV market rather than to passenger cars.

(20) The Notifying Party considers that - similar to passenger cars - the LCV market is 28EEA-wide in scope.

The Commission's assessment

(21) In previous decisions the Commission has considered but ultimately left open whether to further sub-segment LCVs into vehicles (i) up to 3.5 tons and (ii) 29between 3.5-6 tons.

(22) The results of the market investigation were inconclusive as regards the appropriateness of plausible further segmentation of LCVs according to their size. Some market participants in fact indicated that it is an appropriate sub- 30 segmentation,while others indicated that they rather consider LCVs as those 31commercial vehicles only up to 3.5 tons.

(23) In previous decisions the Commission has ultimately left open whether pick-up trucks can be considered passenger cars given that they can be purchased for 32private use and can transport both goods and people.

(24) The results of the market investigation were not entirely conclusive whether pick-up trucks should be considered as a separate product market. Competitors responding to the market investigation indicated that albeit normally registered as commercial vehicles, some customers use pick-up trucks for leisure purposes instead of business purposes. However a large proportion of the respondents to the market investigation in the present case indicated that pick-up trucks are 33mostly considered as commercial vehicles.

(25) In previous decisions the Commission has ultimately left open whether the market for manufacturing and supply of passenger cars and LCVs is EEA-wide or 34 national in scope.Competitors and customers alike indicated that there are price

35 differences between countries based on list pricestaking into account the 36 specific competition conditions and the different national tax regimes.Customer 37 38 preferencesand CO2-emission regulationmight also differ. Furthermore, 39 retailers export vehicles only to a very limited extent.All these factors are pointing towards national markets.

4.1.2. Geographic market definition

(26) In previous decisions the Commission has ultimately left open whether the geographic scope of the markets for manufacturing and supply of passenger cars 40 and LCVs is EEA-wide or national in scope.Competitors and customers alike indicated that there are price differences between countries based on list prices set taking into account the specific competition conditions and the different 42 43 44national tax regimes.Customer preferencesant CO2-emission regulation might also differ. Furthermore, retailers sell vehicles outside the country they are 45 located in only to a very limited extent.All these factors are pointing towards national markets.

4.1.3. Conclusion

(27) In any event, for the purpose of this decision the Commission considers that the question of the exact product and geographic market definition can be left open, as the Transaction does not give rise to serious doubts as to its compatibility with the internal market even under the narrowest plausible market definition.

4.2. Wholesale distribution of new passenger cars and LCVs

46(28) At the wholesale level, distributors or importers distribute vehicles to retailers. The wholesale function is often carried out by subsidiaries of the vehicle manufacturers themselves or by independent distributors, although the latter have

to ensure consistency with the central marketing strategies developed by the 47manufacturers.

47 See cases COMP/M.6403 Volkswagen / KPI Polska / Skoda Auto Polska / VW Bank Polska / VW Leasing Polska (2011); COMP/M.5250 Porsche / Volkswagen (2008); COMP/M.2832 General Motors / Daewoo (2002).

The Notifying Party's view

48 (29) The Notifying Party agrees with the Commission's decisional practiceand submits that the segmentation of the product market between passenger cars and LCVs is sufficient and any further segmentation, particularly by type of car, is not 49appropriate.

(30) As for the geographic scope, the Notifying Party submits that it can be left open, 50whether the market is EEA-wide or national.

The Commission's assessment

(31) The Commission found that this market should not be further sub-segmented based on "classes" of cars, given that manufacturers normally distribute a model range which covers different market segments under the same distribution 51channel.

(32) The Commission has previously considered the wholesale distribution market to 52 be at least national,ultimately leaving the question open whether it is EEA-wide 53or national in scope.

(33) In any event, for the purpose of this decision the Commission considers that the question of the exact product and geographic market definition can be left open, as the Transaction does not give rise to serious doubts as to its compatibility with the internal market even under the narrowest plausible market definition.

4.3. Retail distribution of new passenger cars and LCVs

(34) At the retail level, vehicles are sold to final customers by independent or vertically integrated retailers.

The Notifying Party's view

(35) The Notifying Party submits that the exact product and geographic market 54definition can be left open for the purpose of this decision.

The Commission's assessment

(36) The Commission has previously considered a distinction between the retail 55 distribution of passenger cars and LCVs.Similarly to the wholesale distribution, 56it found that further sub-segmentation is not appropriate.

(37) The Commission has so far left open whether the retail distribution markets are 57EEA-wide, national or local in scope.

(38) In any event, for the purpose of this decision the Commission considers that the question of the exact product and geographic market definition can be left open, as the Transaction does not give rise to serious doubts as to its compatibility with the internal market even under the narrowest plausible market definition.

585. COMPETITIVE ASSESSMENT – HORIZONTAL NON-COORDINATED EFFECTS

5.1. Manufacturing and supply of passenger cars and LCVs

(39) The Transaction gives rise to horizontally affected markets due to the Parties' activities in the following segments: (i) mini cars, (ii) small cars (iii) medium cars, (iv) large cars, (v) SUVs, (vi) multipurpose vehicles, (vii) LCVs and possibly (viii) electric vehicles.

595.1.1. The Notifying Party's view

(40) The Notifying Party submits that no competition concerns would arise from the Transaction as the Parties combined market shares are relatively low on all plausible markets and the merged entity would be constrained by strong competitors post-Transaction.

(41) Furthermore, given that all vehicle manufacturers are already present across the EEA and that there is an overcapacity in the market, the competitors could counterbalance in a timely manner and without further investments any attempt of the merged entity to increase prices.

(42) Moreover, the Notifying Party argues that the Parties' brands are not perceived as close alternatives, therefore the Parties cannot be considered as close competitors.

55 See cases COMP/M.6718 Toyota Tsusho Corporation / CFAO (2012); COMP/M.3388 Ford Motor Company Ltd / Polar Motor Group Ltd (2004). 56 See cases COMP/M.7747 PGA / MSA (2015); COMP/M.6403 Volkswagen / KPI Polska / Skoda Auto Polska / VW Bank Polska / VW Leasing Polska (2011). 57 See cases COMP/M.7747 PGA/MSA (2015); COMP/M.6718 Toyota Tsusho Corporation / CFAO (2012); COMP/M.6403 Volkswagen / KPI Polska / Skoda Auto Polska / VW Bank Polska / VW Leasing Polska (2011); COMP/M. 5709 Volkswagen / Mahag (2009); COMP/M.5250 Porsche / Volkswagen (2008); COMP/M.3388 Ford Motor Company Ltd / Polar Motor Group Ltd (2004); M.3352 VW / Hahn + Lang (2004). 58 On the upstream market for supply of automotive components, based on the information provided by the Notifying Party, Faurecia (PSA) does not achieve more than 30% on any potential component by component market. Therefore, the Transaction does not lead to affected vertical links and negative effects are unlikely to arise. 59 Paragraph 75 of the Form CO.

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Finland, Luxembourg and Norway, Opel considers that the closest alternative for the Opel Karl is the […]. In France, the closest alternative is the […], while in the Netherlands and in the UK, it is the […] and in Portugal it is the […] from a 82technical point of view.

(80) The Commission considers that the Parties are not close competitors to each other with regard to the segment of mini cars.

83(81) First, internal documents have further confirmed that […].

84 85(82) Second, according to the NCBS surveythe brand substitution […].

(83) Third, in the market investigation the majority of the retailers replied that end- 86customers do not see the Parties as close alternatives in the mini car segment. Indeed, the majority of the customers asked stated the Transaction will have no 87 88 impact,that the intensity of competition will remain the same,that the price 89 level in the different segments will also remain the sameand that the merged entity will not have a degree of control on the market that would make it difficult 90 for other companies to compete with them.The results of the market investigation further indicated that most competitors also do not see the Parties' models as each other's close alternatives in the mini car segment in the affected 91 markets.Moreover, competitors of the Parties consider that as a result of the Transaction, the intensity of competition on the affected markets will stay the 92 same.Also, competitors stated the merged entity will not have a degree of control on the market that would make it difficult for them to compete with the 93Parties.

5.1.3. Segment B: small cars

(85) PSA is present in these markets with its "Peugeot 208", "Citroën C3", "DS3", "C4 94 Cactus", "E-Mehari" models,while Opel is present through the "Corsa" model.

(86) Based on a market defined as EEA-wide in scope, the Transaction gives rise to an affected market (combined market share of [20-30]%). Based on a market defined at national level, the Transaction gives rise to affected markets in Belgium ([20- 30]%), Croatia ([20-30]%), Denmark ([20-30]%), France ([30-40]%), Greece ([20-30]%), Italy ([20-30]%), Luxembourg ([20-30]%), Malta ([20-30]%), the Netherlands ([20-30]%), Portugal ([20-30]%), Spain ([20-30]%) and the UK ([20-30]%).

5.1.3.1. Market structure

i. EEA

(87) The market shares of the Parties and their competitors were the following in the last 3 years.

94 The production of "Peugeot 206" and "Peugeot 207" has been discontinued.

22

closest alternatives are the […] based on technical characteristics, and the […] from a business point of view.

(128) On the other hand, Opel considers that the closest alternative for the Opel Corsa is the […] based on technical characteristics. From a business point of view however, the closest competing model are different depending on the country. The closest competing models to the Opel Corsa from a business point of view is the […] in Belgium, Luxembourg, Malta and Spain, the […] in Croatia and in the UK, the […] in France, the […] in Greece, the […] in Italy and the […] in 121Portugal.

(129) The Commission considers that the Parties are not close competitors to each other with regard to the segment of small cars.

122(130) First, internal documents have further confirmed that […].

(131) Second, according to the NCBS study the brand substitution between Peugeot and 123Opel […].

(132) Third, in the market investigation the majority of the retailers replied that end- 124customers do not see the Parties as close alternatives in the small car segment. Indeed, the majority of the customers asked stated that the Transaction will have 125 126 no impact,that the intensity of competition will remain the same,that the 127 price level in the different segments will remain the sameand that the merged entity will not have a degree of control on the market that would make it difficult 128 for other companies to compete with them.The results of the market investigation further indicated that most competitors also do not see the Parties' models as each other's close alternatives in the small car segment in the affected 129 markets.Moreover, competitors of the Parties consider that as a result of the Transaction, the intensity of competition on the affected markets will stay the 130 same.Also, competitors stated the merged entity will not have a degree of control on the market that would make it difficult for them to compete with the 131Parties.

5.1.3.3. Conclusion

(133) For the reasons mentioned above, the Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to the market for manufacturing and supply of small cars in the EEA, Belgium, Croatia, Denmark, France, Greece, Italy, Luxembourg, Malta, the Netherlands, Portugal, Spain and the UK.

121 Reply to question 1 of RFI01 of 2 June 2017. To be noted, Opel […].

122 [Internal documents].

123 Table 65, Table 66, Table 67 and Annex 9 - NCBS data – Closeness of competition of the Form CO.

124 Non-confidential replies to question 14.2 of questionnaire Q1 – Customers.

125 Non-confidential replies to question 17 of questionnaire Q1 – Customers.

126 Non-confidential replies to question 18 of questionnaire Q1 – Customers.

127 Non-confidential replies to question 19 of questionnaire Q1 – Customers.

128 Non-confidential replies to question 20 of questionnaire Q1 – Customers.

129 Non-confidential replies to questions 19.2 of questionnaire Q2 – Competitors.

130 Non-confidential replies to questions 21.2 of questionnaire Q2 – Competitors.

131 Non-confidential replies to questions 23 and 23.1 of questionnaire Q2 – Competitors.

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and the Citroën C-Elysée, it is respectively the […] and the […] from both standpoints.

(156) On the other hand, Opel considers the closest alternative for the Opel Cascada to be the […] from a business point of view in all of these countries, except in Spain where it is the […]. In all of these countries, the closest alternative based on technical characteristics is the […] except in the Netherlands where it is the […]. 145 Opel considers that the closest alternative for the Opel Astrais the […] in Belgium, Denmark and Spain. In France, the […] is the closest alternative from a technical point of view and the […] is the closest from a business point of view. In Greece, the […] is the closest from a technical point of view, and the […] is the closest from a business point of view.

(157) The Commission considers that the Parties are not close competitors to each other with regard to the segment of medium cars.

146(158) First, internal documents have further confirmed that […].

(159) Second, according to the NCBS study the brand substitution between Peugeot and 147Opel […].

(160) Third, in the market investigation the majority of the retailers replied that end-customers do not see the Parties as close alternatives in the medium car 148 segment.Indeed, the majority of the customers asked stated that the 149 Transaction will have no impact,that the intensity of competition will remain 150 151the same,that the price level in the different segments will remain the same and that the merged entity will not have a degree of control on the market that 152 would make it difficult for other companies to compete with them.The results of the market investigation further indicated that most competitors also do not see the Parties' models as each other's close alternatives in the medium car segment in 153 the affected markets.Moreover, competitors of the Parties consider that as a result of the Transaction, the intensity of competition on the affected markets will 154 stay the same.Also, competitors stated the merged entity will not have a degree of control on the market that would make it difficult for them to compete with the 155Parties.

5.1.4.3. Conclusion

(161) For the reasons mentioned above, the Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with

145 Response to question 1 of the RFI01 of 2 June 2017. To be noted, […].

146 [Internal documents].

147 Table 65, Table 66, Table 67 and Annex 9 - NCBS data – Closeness of competition of the Form CO.

148 Non-confidential replies to question 14.3 of questionnaire Q1 – Customers.

149 Non-confidential replies to question 17 of questionnaire Q1 – Customers.

150 Non-confidential replies to question 18 of questionnaire Q1 – Customers.

151 Non-confidential replies to question 19 of questionnaire Q1 – Customers.

152 Non-confidential replies to question 20 of questionnaire Q1 – Customers.

153 Non-confidential replies to questions 19.3 of questionnaire Q2 – Competitors.

154 Non-confidential replies to questions 21.3 of questionnaire Q2 – Competitors.

155 Non-confidential replies to questions 23 and 23.1 of questionnaire Q2 – Competitors.

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respect to the market for manufacturing and supply of large cars in France and in Malta.

5.1.6. Segment J: SUVs

(177) PSA is present in these markets with its "Peugeot 2008" and "Peugeot 3008" models, while Opel is producing "Mokka". The Peugeot 2008 and the Opel Mokka are sub-compact SUVs but the Peugeot 3008 is considered as a compact 174 175 176model which means bigger load spaceand also a higher price.

(178) If the market were to be defined as EEA-wide in scope, the Transaction would not lead to an affected market in this segment (combined market share of [10-20]%). Based on a narrower – national – geographic market definition, the Transaction gives rise to an affected market in France.

(179) If the SUV segment were to be further sub-segmented based on the size of the vehicles, the Transaction gives rise to affected markets with regard to small (sub- compact) SUVs both on an EEA-wide level and on a national level in Austria, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.

5.1.6.1. Market structure

A.SUVs - France

(180) The market shares of the Parties and their competitors were the following in the last 3 years.

174 Opel Mokka: 356 litres; Peugeot 2008: 410 litres; Peugeot 3008: 520 litres.

175 In France for example, the entry level price of these cars are the following: Peugeot 2008 – […], Opel Mokka – […], Peugeot 3008 – […]. The same difference can be observed with regard to the average price: Peugeot 2008 – […], Opel Mokka – […], Peugeot 3008 – […].

176 Reply to questions 7-9 of RFI01 of 2 June 2017.

47

(396) On an EEA-wide battery electric LCV segment PSA achieved a market share of [10-20]% in 2016.The merged entity would continue to face competition from strong competitors such as Renault-Nissan ([60-70]%).Furthermore, several competitors have already announced new launchesor refurbishmentsin this segment.

(397) In view of the above, the Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to the market for manufacturing and supply of electric vehicles, irrespective of the product and geographic definition.

5.1.10. Conclusion

(398) In view of the above, the Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to the market for manufacturing and supply of passenger cars and LCVs, irrespective of the market definition.

5.2. Wholesale distribution of passenger cars and LCVs

The Notifying Party's view

(399) The Notifying Party submits that no competition concern would arise from the Transaction as the Parties' market shares are relatively low on all plausible markets. Furthermore, both Parties have their own distribution channels, therefore their activities do not overlap with regard to the wholesale distribution of passenger cars and LCVs.

The Commission's assessment

(400) The Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to the market for wholesale distribution of passenger cars and LCVs, irrespective of the market definition, for the following reasons.

(401) First, the combined market shares of the Parties are indeed not high. Given that they do not distribute vehicles of competitors; their market share is closely related to competition at the production level. Therefore, their market share on an EEA-wide or national wholesale distribution markets cannot exceed the figures presented in section 5.1 with regard to passenger cars and LCVs. Furthermore, given that PSA's vehicles are also distributed by independent importers, its

market share on the wholesale distribution market is allegedly even lower than on the market for manufacturing and supply of passenger cars and LCVs.

(402) Second, the Commission considers that the Transaction would not have an impact on the competitive landscape of this market. The Parties have their own distribution channels which do not overlap, therefore no competition would be lost due to the Transaction.

(403) Third, no market participant expressed concerns in during the market investigation with regard to the market for wholesale distribution of passenger cars and LCVs.

Conclusion

(404) In view of the above, the Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to the market for wholesale distribution of passenger cars and LCVs.

5.3. Retail distribution of passenger cars and LCVs

The Notifying Party's view

(405) The Notifying Party submits that the Transaction does not raise any competition concerns on any of the retail distribution markets, as the Parties' combined market shares are relatively low on all plausible markets and both Parties have their own distribution channels. Therefore, the competitive landscape will not change as a result of the Transaction.

The Commission's assessment

(406) The Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to the market for retail distribution of passenger cars and LCVs, irrespective of the market definition, for the following reasons.

(407) Both Parties have their own distribution channels which do not overlap, as both of them are only active in the distribution with respect to their own respective brands. Furthermore, neither pre-Transaction, nor post-Transaction, will competing manufacturers rely on PSA’s or Opel’s distribution channels. Similarly, retailers owned by competing manufacturers do not distribute PSA’s or Opel’s vehicles and will continue to do so post-Transaction.

(408) Given that the Parties distribute only their own vehicles, their market position on these markets is closely related to their market share in the manufacturing and supply of passenger cars and LCVs. Moreover, as the Parties' vehicles are also distributed through independent retailers (dealerships) at the retail level, their market shares are below their market shares at the manufacturing and supply level. Therefore, their market share on an EEA-wide or national retail distribution markets cannot exceed the figures presented in section 5.1 with regard to passenger cars and LCVs.

(409) PSA has […]% of independent dealerships and […]% of owned dealerships. Opel […] does not own any dealership in the EEA with the exception of the UK, where

404 it owns a very limited number of dealerships ([…]).Given that Opel's vehicles, with the exception of the […] dealerships located in the UK, are distributed through independent retailers, there is only a minor overlap between the Parties' retail distribution activities within the EEA.

(410) In the UK, […]. Therefore, the Parties’ market share at the retail level should overall be much lower than the Parties’ market shares on the manufacturing and 405sales market at national level.

(411) Should the geographic market be considered local, there is only one affected market for LCVs, in the Vickers Lakeside commercial area of responsibility, 406 where the Parties will hold a combined market share of [20-30]%.However, this market share is only slightly above [20-30]% and the merged entity will continue to face competition from the independent dealerships of that area.

(412) Finally, no market participant expressed concerns during the market investigation with regard to the market for retail distribution of passenger cars and LCVs.

Conclusion

(413) In view of the above, the Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to the market for retail distribution of passenger cars and LCVs, irrespective of the market definition.

6. COMPETITIVE ASSESSMENT – HORIZONTAL COORDINATED EFFECTS

(414) As regards potential horizontal coordinated effects, the Commission considers that the number of competitors active in the market, as well as the nature of the product, make it unlikely that sustainable coordination could be achieved.

(415) First, the competitors of the Parties are numerous and large (Volkswagen, Renault/Nissan, Ford, Fiat Chrysler, Daimler, BMW, Hyundai, Toyota, Honda). They compete fiercely and represent an effective constraint on each other. Following the Transaction, the number of main players will still be around 10.

(416) Second, passenger cars and LCVs are differentiated rather than homogeneous products, even within the same product market (such as mini cars, small cars, medium cars, large cars, multipurpose vehicles, SUVs and LCVs).

(417) For these reasons, it would be difficult for the merged entity and its competitors to reach common terms of coordination.

(418) In view of the above, the Commission considers that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to horizontal coordinated effects in the markets for the manufacturing and supply of passenger cars and LCVs.

404 Paragraphs 193-194 of the Form CO.

405 Paragraph 207 of the Form CO.

406 Paragraph 222 of the Form CO.

7. COMPETITIVE ASSESSMENT – VERTICAL EFFECTS

7.1. Manufacturing and supply of passenger cars and LCVs (upstream) – wholesale distribution of passenger cars and LCVs (downstream)

(419) The Commission considers that the Transaction would not give rise to serious doubts with regard to the vertical link between the manufacturing and supply (upstream) and wholesale distribution (downstream) of passenger cars and LCVs for the following reasons.

(420) With regard to input foreclosure, the Commission notes that that the market shares of the Parties are not very high on the upstream market. Furthermore, there are numerous established competitors present.

(421) As for customer foreclosure, the Parties' market share is also limited on the downstream market and the competitors do not rely on the Parties' as they operate their own exclusive distribution channels and do not distribute the Parties' vehicles.

7.2. Wholesale (upstream) and retail (downstream) distribution of passenger cars and LCVs

(422) The Commission considers that the Transaction would not give rise to serious doubts with regard to the vertical link between the wholesale (upstream) and the retail (downstream) distribution of passenger cars and LCVs.

(423) First, the Parties' combined market share is rather limited on the upstream market for wholesale distribution, while numerous competitors are also present.

(424) Second, the Parties' market share is also limited on the downstream market and the competitors' retailers do not rely on the Parties' as they operate their own exclusive distribution channels and do not distribute the Parties' vehicles.

8. CONCLUSION

(425) For the above reasons, the European Commission has decided not to oppose the notified operation and to declare it compatible with the internal market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation and Article 57 of the EEA Agreement.

For the Commission

(Signed) Margrethe VESTAGER Member of the Commission

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