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| 19.10.2021 | EN | Official Journal of the European Union | C 423/14 |

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SUMMARY OF COMMISSION DECISION

of 21 December 2020

declaring a concentration compatible with the internal market and the functioning of the EEA Agreement

(Case M.9730 – FCA/PSA)

(notified under document number C(2020) 9109)

(Only the English version is authentic)

(2021/C 423/10)

On 21 December 2020 the Commission adopted a Decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings [(1)](#ntr1-C_2021423EN.01001401-E0001)
, and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case on the website of the Directorate-General for Competition, at the following address: http://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy\_area\_id=2

I.   THE PARTIES AND THE OPERATION

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| | (1) | On 8 May 2020, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (the ‘Merger Regulation’) by which Peugeot S.A. (‘PSA’, France) and Fiat Chrysler Automobiles N.V. (‘FCA’, the Netherlands), controlled by EXOR N.V. would enter into a full merger within the meaning of Article 3(1)(a) of the Merger Regulation. |

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| | (2) | PSA is active worldwide in the manufacture, supply and distribution of passenger cars (‘PCs’) and light commercial vehicles (‘LCVs’) under the Peugeot, Citroën, Opel, Vauxhall and DS brands. Through its subsidiary, Faurecia S.A. (‘Faurecia’), it is also active in the manufacture and supply of various automotive components. PSA also provides ancillary services such as financing solutions for the acquisition of its branded motor vehicles, as well as mobility services and solutions. |

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| | (3) | FCA is active worldwide in the manufacture, supply and distribution of PCs and LCVs under the brands Fiat, Chrysler, Jeep, Alfa Romeo, Lancia, Abarth, Dodge, Ram, and Fiat Professional. In addition, FCA owns the automotive cast components business Teksid S.p.A. (‘Teksid’), the plastic components and modules business Plastic Components and Modules Automotive S.p.A. (‘PCMA’), and the industrial automation business Comau S.p.A. (‘Comau’). FCA also provides financing solutions to support the sale of its branded vehicles. |

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| | (4) | PSA and FCA are designated in this Decision as the ‘Notifying Parties’ or ‘Parties’ to the ‘Proposed Transaction’. |

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| | (5) | Pursuant to the Combination Agreement signed on 17 December 2019, on the date of closing, all issued and outstanding PSA and FCA shares will be exchanged for shares of a newly incorporated entity based in the Netherlands according to the exchange rate agreed between the Parties. The Combination Agreement was amended on 14 September 2020. The amendments were economic in nature in light of the impact of the Covid-19 pandemic, but did not affect the structure or scope of the merger. |

II.   THE PROCEDURE

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| | (6) | On 17 June 2020 the Commission found that the Proposed Transaction raised serious doubts as to its compatibility with the internal market and the EEA agreement and adopted a decision to initiate proceedings pursuant to Article 6(1)(c) of the Merger Regulation. The Notifying Parties submitted their written comments to the Article 6(1)(c) decision on 30 June 2020. |

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| | (7) | On 3 July 2020 the merger review period was extended by 15 working days following the Parties’ request pursuant to Article 10(3) of the Merger Regulation. |

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| | (8) | On 20 July 2020, the Commission adopted a decision pursuant to Article 11(3) of the Merger Regulation that suspended the time limit for adopting a final decision in this case. This suspension of the time limit expired on 28 September 2020. |

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| | (9) | On 28 September 2020, the Commission launched a market test on the commitments submitted by the Notifying Parties on 25 September 2020 to address the preliminary competition concern identified by the Commission and following detailed discussions. On 27 October 2020, the Notifying Parties formally submitted the final version of the commitments (‘Final Commitments’). |

III.   SUMMARY OF ASSESSMENT

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| | (10) | The Parties’ activities mainly overlap in two areas (i) manufacture and sale, wholesale and retail distribution of PCs; and (ii) manufacture and sale, wholesale and retail distribution of LCVs. Both Parties, via FCA’s subsidiaries Teksid, PCMA and Comau and PSA’s subsidiary Faurecia also manufacture and sell various automotive spare parts, components, and solutions but for the large part, these activities are complementary. This activity is, moreover, vertically related to the manufacture of PCs and LVCs. Finally, both Parties also provide automotive financing and related services. The overlaps are summarised in the following. |

A.   The relevant markets

Manufacture and sale of PCs and LCVs

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| | (11) | The Commission has previously defined separate markets for the manufacture and supply of PCs on the one hand, and of commercial vehicles on the other hand. |

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| | (12) | Within commercial vehicles, it has considered that (i) LCVs, (ii) medium-size trucks; and (iii) heavy duty trucks constitute separate product markets. Within LCVs, the Commission has left open whether LCVs should be further sub-segmented into vehicles with a gross weight rating of up to 3.5 tonnes, and between 3.5 and 6 tonnes and whether pick-up trucks should be excluded from the LCV market(s). |

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| | (13) | Based on its analysis and the market investigation in this case, the Commission has concluded that (i) LCVs up to 3.5 tonnes can be distinguished between Small LCVs, Medium LCVs and Large LCVs (the latter including semi-finished LCV products for conversion), and that (ii) it can be left open whether Large LCVs (up to 3.5 tonnes) and LCVs between 3.5 and 6 tonnes should be considered part of the same or separate product markets. Moreover, pick-up trucks, car derived vans and PC versions of LCVs for passengers are not part of the LCV markets. |

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| | (14) | Within PCs, it has considered separate product markets for (i) mini cars (A), (ii) small cars (B), (iii) medium cars (C), (iv) large cars (D), (v) executive cars, (vi) luxury cars (vii) sport cars, (viii) sport utility vehicles (SUVs) and (ix) multipurpose vehicles (M), as well as a (x) wider segment of small cars including both segments A and B. The Commission also considered a further sub-segmentation of the SUV segment into (i) mini (A-SUVs), (ii) small (B-SUVs), (iii) medium (C-SUVs), (iv) large SUVs (D-SUVs), and (v) luxury (E-SUVs), but left the market definition open. |

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| | (15) | Based on the Commission’s analysis and the market investigation in this case, the Commission has considered that its previous segmentation for PCs remains appropriate. |

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| | (16) | The Commission also investigated whether low emission vehicles (‘LEVs’) constitute a separate product market from internal combustion engine (‘ICE’) vehicles and whether the LEV market market should be further segmented according to (i) technology (electric battery cars and hybrid cars) or (ii) the categories defined for ICE cars. The Commission considers it unnecessary to further sub-segment PC markets between LEVs and ICE vehicles or within LEV by type of propulsion technology, since FCA’s share in any hypothetical LEV markets would be zero (or close to zero for any vehicles launched in 2020). |

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| | (17) | The Commission considers that the question of the exact product market definition can be left open, as the Proposed Transaction does not give rise to serious doubts as to its compatibility with the internal market in any of the PC markets even under the narrowest plausible market definition. |

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| | (18) | Based on its analysis and the market investigation, the Commission has considered, in line with its decisional practice, that the markets for the manufacture and supply of LCVs and PCs are national in scope. However, since the conditions of supply are determined at EEA-level, the Commission considers that competition at this level cannot be ignored. Therefore, although the assessment will take place mainly at national level, EEA-wide market shares and the EEA-wide competitive landscape will also be taken into account. |

Wholesale and retail distribution of LCVs and PCs

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| | (19) | In previous decisions, the Commission has defined product markets for the wholesale and retail distribution of PCs and LCVs. Although the Commission has distinguished in some precedents between the wholesale and retail distribution of passenger cars on the one hand and LCVs on the other hand, it has ultimately left open the precise product market definition. In any case, the Commission has found that a further sub-segmentation within PCs and LCVs based on types of vehicles would not be appropriate. For the purposes of this decision, the Commission has followed the Commission’s case practice. |

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| | (20) | In previous decisions, the Commission has left open whether the wholesale distribution market is EEA-wide or national in scope and whether the retail distribution markets should be considered EEA-wide, national or local in scope. For the purposes of this decision, the Commission has followed the Commission’s case practice. |

Manufacture and sale of automotive components

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| | (21) | In previous cases involving the manufacture and supply of automotive components, the Commission considered, while ultimately leaving open, whether (i) each automotive component constitutes a separate market, or whether (ii) modules/systems constitute the appropriate product markets. The Commission has followed this principle also in this case. As the Parties and their subsidiaries only sell components to OEM/OES, the independent aftermarket was not analysed in the decision. |

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| | (22) | In previous decisions, the Commission considered that the market for automotive components for sale to OEMs/OES to be at least EEA-wide and in some cases worldwide, but ultimately left the precise geographic market definition open. |

Retail banking - motor vehicle lending

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| | (23) | In previous decisions, the Commission considered that, (i) within retail banking, consumer credit could constitute a distinct market, and (ii) within consumer credit, credit (lending) for the purchase of motor vehicles and credit offered for the purchase of other consumer goods could constitute separate markets. In relation to motor vehicle lending, the Commission considered a market limited to non-captive activities (the ‘merchant market’), excluding captive activities, but ultimately left the precise product market definition open. Within a market for automotive financing services the Commission has further considered a sub-segmentation into the markets for (i) motor vehicle lending and (ii) leasing services for motor vehicles (potentially sub-segmented between financial and operational leases). Ultimately, the Commission left the precise product market definition open. |

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| | (24) | In line with previous Commission decisions, for the purposes of this decision the Commission considers the geographic market for (i) motor vehicle lending national in scope; (ii) leasing services (financial and operational) national or wider in scope; and (iii) lending to car dealers national in scope. |

Lending to SMEs – lending to car dealers

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| | (25) | In previous decisions, the Commission has considered a segmentation of the corporate banking market based on the customer group, i.e. between (i) banking services to large corporate customers (possibly further segmented by category of products) and (ii) banking services to SMEs, possibly, as well as within banking services to SMEs a separate segment for lending to car dealers. For the purposes of this decision, the Commission analyses the automotive financing market at the narrowest plausible market of lending to car dealers. |

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| | (26) | In line with previous Commission decisions, for the purposes of this decision the Commission considers the geographic market for (i) motor vehicle lending national in scope; (ii) leasing services (financial and operational) national or wider in scope; and (iii) lending to car dealers national in scope. |

B.   Competitive assessment

Market for the manufacture and supply of LCVs

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| | (27) | The Parties’ activities overlap on the markets for the manufacture and supply of Small LCVs, Medium LCVs and Large LCVs, with numerous affected markets at national level. |

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| | (28) | In the market for the manufacture and supply of Small LCVs, the affected markets are Austria, Belgium, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. |

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| | (29) | The Commission considers that the Proposed Transaction raises serious doubts as to its compatibility with the internal market in the Small LCV markets in Belgium, Czechia, France, Greece, Italy, Lithuania, Poland, Portugal and Slovakia as it is likely to significantly impede effective competition in those markets. In all these markets the following circumstances are present: (i) the combined market shares of the Parties are high or very high, (ii) the share increment brought by the Proposed Transaction is not insignificant, (iii) FCA and PSA are considered particularly close competitors, (vi) the remaining competitors alone do not, either because they are not as close competitors or because their market shares are insufficiently high, appear to impose a sufficient constraint on the Parties, and (vii) new entries in the short- to medium-term are unlikely due to the relatively high barriers to entry. Moreover, the Parties’ combined shares at EEA level suggest limited out-of-market constraints. |

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| | (30) | In the rest of EEA Member States, the Proposed Transaction would not significantly impede effective competition. In particular, in a number of EEA Member States (Denmark, Estonia, Finland, Ireland, Norway, Sweden and United Kingdom), the share increment brought by the Proposed Transaction is very limited or a number of alleviating factors existed: the fact that the combined share was always below the presumption of dominance of 50 % set out in the Horizontal Merger Guidelines, the existence of other strong competitors – some of which also close or particularly close to the Parties – with reputed brands in the LCV markets and wide service networks as well as the existence of spare capacity in the market. In some of those markets, the Commission has also concluded that the Parties are not sufficiently close competitors. |

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| | (31) | In the market for the manufacture and supply of Medium LCVs, the affected markets are: Austria, Belgium, Czechia, France, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Poland, Portugal, Slovakia and Spain. |

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| | (32) | The Commission considers that the Proposed Transaction would not significantly impede effective competition in any of these markets. In most of them, the share increment brought by the Proposed Transaction was very limited and/or the combined market share was relatively low. Only in Belgium, Greece, Italy, Luxembourg and Slovakia, the Parties’ combined share was moderate or relatively high. However, even though in some of these countries the Parties were also close competitors, the Commission took into account a number of alleviating factors: the fact that the combined share was always below the presumption of dominance of 50 % set out in the Horizontal Merger Guidelines, the existence of other strong competitors – some of which also close or particularly close to the Parties – with reputed brands in the LCV markets and wide service networks as well as the existence of spare capacity in the market. Moreover, at EEA level the Parties’ shares are lower and the market is less concentrated, which suggests that the Parties may face out-of-market constraints. |

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| | (33) | In the market for the manufacture and supply of Large LCVs, the affected markets are: Austria, Belgium, Croatia, Czechia, Denmark, Estonia, Finland, France, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom. |

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| | (34) | The Commission considers that the Proposed Transaction would not significantly impede effective competition in any of these markets. In a number of these markets, the share increment brought by the Proposed Transaction was very limited and/or the combined market share was relatively low (Denmark, Estonia, Finland, Latvia, Lithuania, Romania, Poland, Portugal, Sweden and United Kingdom). In Austria, Belgium, Croatia, Czechia, France, Greece, Hungary, Italy, Luxembourg, Norway, Slovakia, Slovenia and Spain, the Parties’ combined share was moderate and in some cases even relatively high. However, even though in some of these countries the Parties were also close competitors, the Commission took into account a number of alleviating factors: the fact that, except in the case of Slovakia, the combined share was always below the presumption of dominance of 50 % set out in the Horizontal Merger Guidelines, the existence of other strong competitors – some of which also close or particularly close to the Parties – with reputed brands in the LCV markets and wide service networks and the existence of spare capacity in the market. In the case of Slovakia, although the combined share was very high, the Commission took into account the volatility of the shares and the absence of any competition concerns concerning this country resulting from the market investigation. Moreover, at EEA level the Parties’ shares are lower and the market is less concentrated and with more competitors than in Small LCVs, which suggests that the Parties may face out-of-market constraints. |

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| | (35) | In the market for LCVs between 3.5 and 6 tonnes, there are only two affected markets: France and United Kingdom, and the Parties’ combined market share was moderate in both cases. In a market combining both Large LCVs and LCVs between 3.5 and 6 tonnes, the market shares are considerably lower than in the Large LCV market. Moreover, sales of LCVs between 3.5 and 6 tonnes constitute a minor portion (5 %) of the total market, which means that the assessment for Large LCVs broadly applies to the broader market. |

Market for the manufacture and supply of PCs

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| | (36) | The Parties’ activities overlap in the manufacture and supply of PCs with numerous affected markets at national level. |

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| | (37) | In the market for the manufacture and supply of segment A cars (‘mini cars’), the affected national markets were Austria, Belgium, Bulgaria, Croatia, Denmark, France, Germany, Greece, Hungary, Italy, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. However, taking into account the foreseeable future development of this market, the Commission considers that the Proposed Transaction would not significantly impede effective competition in any mini car market in the EEA. |

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| | (38) | In the market for the manufacture and supply of segment B cars (‘small cars’), the affected national markets are Belgium, France, Greece, Italy, Portugal, Spain, and the United Kingdom. In none of these countries the Parties’ combined share exceeds 40 %, and in all affected countries, except in Italy, the increment brought about by the Proposed Transaction is minimal. The Commission therefore considers that the Proposed Transaction would not significantly impede effective competition in any of these EEA Member States. |

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| | (39) | In the market for the manufacture and supply of segment A and B cars, the affected national markets are (in addition to the affected countries mentioned above for a market comprising only small cars): Austria, Bulgaria, Croatia, Denmark, Hungary, Latvia, Lithuania, Luxembourg, and Slovenia. The Parties’ combined share does not exceed 40 % in any of the affected markets, except for Italy and Lithuania. Moreover, the Parties are not close competitors in this hypothetical market, since they are mainly present in different segments (PSA in segment B PCs, and FCA in segment A PCs). The Commission therefore considers that the Proposed Transaction would not significantly impede effective competition in any of these EEA Member States. |

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| | (40) | In the market for the manufacture and supply of segment C cars (‘medium cars’), the affected national markets are France, Greece, Italy, Lithuania, Malta and Portugal. The market for medium cars is not very concentrated and, post-merger, there would still be more than ten companies present with multiple models on the market. Moreover, this is a market in decline. The Commission therefore considers that the Proposed Transaction would not significantly impede effective competition in any of these EEA Member States. |

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| | (41) | In the market for the manufacture and supply of segment D cars (‘large cars’), the affected national markets are Croatia, France and Malta. Given the small or negligible increment brought about by FCA in those markets, and other alleviating factors, the Commission considers that the Proposed Transaction would not significantly impede effective competition in any of these EEA Member States. |

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| | (42) | In the market for the manufacture and supply of all SUVs, the affected national markets are Belgium, France, Italy, Lithuania, Netherlands, Portugal and Spain. Given the relatively low or moderate market share of the merged entity, the existence of several other competitors in each national market and some Member State specific elements, the Commission considers that the Proposed Transaction would not significantly impede effective competition in a market comprising all SUVs. |

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| | (43) | In the market for the manufacture and supply of segment B-SUVs, the affected national markets are Austria, Belgium, Croatia, Czechia, Denmark, France, Germany, Greece, Italy, Lithuania, Luxembourg, Netherlands, Portugal, Slovakia, Slovenia, Spain and United Kingdom. Given that, overall, market participants perceive the B-SUV segment as a highly competitive market, with intense competition and numerous players, the Commission considers that the Proposed Transaction would not significantly impede effective competition in any of these EEA Member States. |

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| | (44) | In the market for the manufacture and supply of segment C-SUVs, the affected national markets are Belgium, France, Italy, Netherlands, Portugal and Spain. Given that, overall this segment is also growing, and the Parties’ combined shares and increment are low to moderate, the Commission considers that the Proposed Transaction would not significantly impede effective competition in any of these EEA Member States. |

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| | (45) | In the market for the manufacture and supply of segment M cars (‘MPVs’), the affected national markets are Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain and the United Kingdom. Overall, segment M is in decline (and this decline is expected to continue in the future, mostly because customers are switching to SUVs), the Parties are either not close or not particularly close competitors, most of market respondents have not identified any concerns in any of the affected markets, and the Parties’ combined share is moderate in most countries. In the countries where the combined share is higher (Croatia, Estonia, Greece, Italy and Spain), the increment is small, except in Italy and Greece, where other alleviating factors apply. Therefore, the Commission considers that the Proposed Transaction would not significantly impede effective competition in any of these EEA Member States. |

Wholesale distribution of LCVs and PCs

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| | (46) | At the wholesale level, PSA and FCA distribute their vehicles in the EEA either through their own subsidiaries which only distribute their own vehicles or via independent importers. PSA and FCA do not distribute vehicles of other OEMs. Given that in many Member States one or both of the Parties distribute via independent importers, their wholesale activities only overlap in 13 Member States. |

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| | (47) | Since the Parties have their own distribution channels which do not overlap, irrespective of the market shares of the Parties, the Proposed Transaction will not have an impact on the competitive structure of the wholesale markets. In other words, FCA only distributes FCA vehicles to its distribution networks. In those sales, it does not compete with PSA, which only distributes PSA vehicles to its own networks. At most, the Parties could be said to compete for the market, in the occasions in which they search for new dealers in certain areas. Therefore, any loss of competition due to the Proposed Transaction would be significantly more limited than any loss of competition in the manufacture and supply markets. |

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| | (48) | For the wholesale distribution of LCVs only, the Parties’ combined market share does not exceed 50 % in any Member State. In countries with the highest combined market share, as well as in countries with the highest increment, there would post-merger be at least four competitors, all of them strong OEMs both at national and EEA-level, with wide distribution networks. |

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| | (49) | For the wholesale distribution of PCs only, the Parties’ combined market share does not exceed 40 % in any Member State and the increment does not exceed 10 %, except for Italy. However, in Italy there would still be five competitors post-merger and two with a market share similar to the increment. Again, the Parties’ market distribution networks do not overlap, which means that the loss of competition resulting from the Proposed Transaction would be limited. |

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| | (50) | For the wholesale distribution of PCs and LCVs combined, the market structure is somewhat worse than in PCs, but not significantly different. In view of the above, the Commission considers that the Proposed Transaction would not significantly impede effective competition with respect to the market for wholesale distribution of PCs and LCVs, irrespective of the market definition. |

Retail distribution of LCVs and PCs

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| | (51) | The Commission notes that 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 FCA’s distribution channels. |

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| | (52) | The Parties distribute their vehicles either through owned dealerships or via independent dealers. Their presence in the retail distribution in the EEA is however minor, as the large majority of PSA’s and FCA’s dealers are independent. In addition, both Parties make some direct sales to end customers. |

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| | (53) | At national level, the only affected market that arises is that of retail distribution of LCVs in Portugal, where the Commission considers that the Proposed Transaction would not significantly impede effective competition with respect to the retail distribution of LCVs given the relatively low combined market share, the very small increment, and the fact that the Parties will continue to face strong competition both from dealers distributing other OEM brands, whether independent or not, as well as from independent dealers distributing PSA and FCA vehicles. |

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| | (54) | At local level, the following local catchment areas result in affected markets: (i) retail distribution of PCs in Valencia, Spain; (ii) retail distribution of PCs and LCVs in Valencia, Spain; (iii) retail distribution of LCVs in Villeneuve d’Ascq, France; (iv) retail distribution of LCVs in Boulogne Billancourt, France; and (v) retail distribution of LCVs in Seville, Spain. |

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| | (55) | The Parties combined market share, irrespective of the market definition would be less than 25 % with an increment of less than 5 %, except for Seville. However, in Seville the market share does not exceed 40 % and in any event, the Parties will continue to face strong competition both from dealers distributing other OEM brands, whether independent or not, as well as from independent dealers distributing PSA and FCA vehicles even in the local catchment area of Seville. |

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| | (56) | Therefore, the Commission considers that the Proposed Transaction would not significantly impede effective competition with respect to the market for the retail distribution of PCs and LCVs, irrespective of the market definition. |

Automotive components

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| | (57) | Automotive components are an input into the manufacture of light vehicles (PCs and LCVs). The Commission did not find any competition concerns for the following reasoning. |

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| | (58) | The merged entity would not have the ability or the incentive to engage in input foreclose in respect of the inputs in the EEA, given that (i) Faurecia has moderate market shares in the markets for recliners, length adjusters, exhaust systems and hot ends under any plausible market definition, (ii) a significant number of competitors are active in these upstream markets which can supply these components to OEMs and (iii) the results of the Phase I market investigation show that there is spare capacity in the markets for the manufacture of recliners, length adjusters, exhaust systems and hot ends. |

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| | (59) | The merged entity would not have the ability or the incentive to engage in input foreclosure in respect of cockpit module and centre console assembly services in the EEA or worldwide, given that (i) Faurecia competes not only with other external providers of cockpit module and centre console assembly services, but also with OEMs, many of which assemble these modules in-house, (ii) even on a merchant market, a number of credible competitors are active in the upstream market which can offer cockpit module and centre console assembly services to OEMs and (iii) the results of the Phase I market investigation show that there is spare capacity in the merchant market for cockpit module and centre console assembly services. |

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| | (60) | Finally, the merged entity would not have the ability or the incentive to engage in customer foreclose for any of recliners, length adjusters, exhaust systems, hot ends, cockpit module assembly services or centre console assembly services in the EEA or worldwide, given that (i) a significant number of players is active in the downstream market for the manufacture and supply of PCs and LCV which purchase these components and assembly services (ii) the limited impact of the Proposed Transaction on the market structure and (iii) evidence suggesting that OEMs prefer to multi-source from various suppliers. |

Automotive financing and related services

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| | (61) | In the markets for automotive financing the Parties provide automotive financing and related service through captive finance companies (‘CFCs’). The primary business strategy of CFCs is to help their respective automotive groups sell more vehicles by offering competitive financing programmes through franchised vehicle dealerships. |

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| | (62) | Affected markets arise only in relation to motor vehicle lending in Italy and lending to car dealers in France, Italy, the Netherlands and Spain. |

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| | (63) | Given the negligible increment and limited combined market share of the Parties in the market for motor vehicle lending in Italy on a non-captive sales only basis, and the relatively low combined market share on a captive and non-captive sales basis, the Proposed Transaction is unlikely to have any significant impact on the competition in the market of motor vehicle lending. |

Lending to car dealers

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| | (64) | The Parties’ combined market share (captive and non-captive together) in the market for lending to car dealers is [30-40] % (France), [40-50] % (Italy), [20-30] % (the Netherlands) and [20-30] % (Spain), based on the market shares the Parties hold in a combined market for PCs and LCVs. |

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| | (65) | Given that the activities of the Parties only overlap to a very small extent as in particular most of PSA CFCs’ lending is captive, the Proposed Transaction is therefore unlikely to have any significant impact on the competition in the market for lending to car dealers if such market was considered. |

Conclusion

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| | (66) | The decision, therefore, concludes that the Proposed Transaction raises serious doubts as to its compatibility with the internal market with regard to the Small LCV markets in Belgium, Czechia, France, Greece, Italy, Lithuania, Poland, Portugal and Slovakia as it is likely to significantly impede effective competition in those markets. |

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| | (67) | As regards all other markets, the Commission considers that the Proposed Transaction does not lead to a significant impediment of effective competition. |

IV.   COMMITMENTS

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| | (68) | In order to address the competition concerns identified in the market for the manufacturing and sale of Small LCVs, the Parties have submitted the Final Commitments, including some modifications to take account of the results of the market test, as described below. |

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| | (69) | The Final Commitments contain a two-pronged remedy. The first part of the remedy consists of an extension of the cooperation agreement currently in force between PSA and Toyota Motor Europe (‘TME’) (the ‘Toyota cooperation remedy’). |

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| | (70) | PSA currently supplies Small and Medium LCV models – and the corresponding ‘M-segment’ PC versions of the both models – to Toyota for sale under the Toyota brand. As regards Small LCVs, the cooperation in place contemplates the supply by PSA to Toyota of a Toyota-branded Small LCV model (Toyota ProAce City) for sale by Toyota. |

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| | (71) | The ‘Toyota cooperation remedy’ consists in an increase in the capacity of Small LCVs reserved for Toyota under the existing cooperation agreement and a reduction in the price of the vehicles and spare parts and accessories related to that capacity increase. |

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| | (72) | The second part of the remedy consists of an amendment of the repair and maintenance agreements for PCs and LCVs in force between PSA, FCA and their repairer networks in order to facilitate access for third-party OEMs to FCA and PSA’s repair and maintenance networks for LCVs (the ‘repair network remedy’). The repair network remedy applies only with respect to repair shops located in Belgium, Czechia, France, Greece, Italy, Lithuania, Portugal, Poland and Slovakia. |

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| | (73) | In the Commission’s view the Final Commitments adequately address the competition concerns identified for the following main reasons: |

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| | (74) | The remedy would allow Toyota to reach a market share in the EEA which is equivalent to FCA’s current EEA-wide market share. |

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| | (75) | The discount provided by PSA to Toyota for the capacity increase puts Toyota in a better position when selling those vehicles to the market. The pricing for the capacity increase is structured in a manner which effectively incentivises Toyota to sell those additional marginal volumes. |

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| | (76) | PSA will also grant Toyota increased discounts on the service parts and accessories. This means that Toyota can price more aggressively when selling the vehicle. |

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| | (77) | The repair part of the remedy will facilitate access to repair and service networks which intends to offer access to a service network to new entrants rather than established OEMs with their own networks. |

V.   CONCLUSION

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| | (78) | For the reasons mentioned above, the Commission concludes that, subject to full compliance with the Final Commitments given by the Parties on 27 October 2020, the Proposed Transaction will not significantly impede effective competition in the internal market or in a substantial part of it. Consequently, the draft Commission declares the concentration compatible with the internal market and the EEA Agreement, in accordance with Articles 2(2) and Article 8(2) of the Merger Regulation and Article 57 of the EEA Agreement. |

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[(1)](#ntc1-C_2021423EN.01001401-E0001)  [OJ L 24, 29.1.2004, p. 1](http://publications.europa.eu/resource/oj/JOL_2004_024_R_TOC).

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