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 .  EUROPEAN COMMISSION  
Brussels, 10.12.2019  
C(2019 ) 9097 final  
PUBLIC VERSION  
 
To the notifying parties  
Subject : Case M. 9360  – Daimler / Geely / JV  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 8 November 2019 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which Daimler AG 
(“Daimler”, Germany)  and Zhejiang Geely Holding Group Co. Ltd (“Geely”, 
People's Republic of China)  acquire , within the meaning of Article 3(1)(b) and 3(4) 
of the Merger Regulation , joint control of a newly created joint venture ( “JV” ) by 
way of a purchase  of shares (the “ Transaction”)3. Daimler and Geely are designated 
hereinafter as the “Parties ” or “the notifying Parties” . 
                                                 
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 387, 15.11 .2019 , p. 17. 
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possible the information omitted has been 
replaced by ranges of figures or a general 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.  
 
 
2 1. THE PARTIES  
(2) Daimler  develops, manufactures and distributes automotive products, mainly 
passenger cars, trucks, vans and buses.  Its business is divided in five divisions: 
Mercedes -Benz Cars, Daimler Trucks, Mercedes -Benz Vans, Daimler Buses and 
Daimler Financial Services. The Mercedes -Benz Car division sells passenger cars 
under the Mercedes -Benz and smart brands.  
(3) Geely  is an automobil e manufacturer engaged in the production and sales of 
passenger vehicles worldwide. Geely has global operations spanning the automotive 
value chain, from research, development and design to production, sales and service . 
Geely's  headquarter is in Hangzhou,  China.  Geely owns the Volvo passenger car and 
Light Commercial Vehicle (“ LCV ”) business . 
2. THE TRANSACTION  
2.1. Structure of the Transaction  
(4) Daimler and Geely will jointly establish and control a full -function JV established  in 
China (“JV”) and a wholly owned su bsidiary of the joint venture  in the EU (“EU 
Sales JV ”).  
(5) The JV will develop, manufacture and distribute the next generation of pure battery 
electric vehicles ( “BEV ”) models of the  smart brand. The JV will initially focus on 
three small vehicles including a [internal names of target vehicles]  (“Target 
Vehicles”) . The manufacture of Target Vehicles will take place in China. The 
distribution, including the provision of aftersales services, of Target Vehicles in 
China [details ab out the distribution in China]  with sales due to begin in 2022 . 
(6) The EU Sales JV  will be a new sales and marketing company incorporated in the 
EU by the JV. It will be responsible for the sales and marketing of the Target 
Vehicles in Europe. [Details about the distribution in Europe] .  
2.2. Joint control  
(7) Pursuant to a Joint Venture Contract (“JVC”) signed on 26 March 2019 , Daimler and 
Geely will each acquire shares representing 50% of the total voting rights of the JV 
and each will appoint three Directors. Decisions in relation to the JV’s commercial 
strategy will be adopted by unanimity  or by simple majority with the affirmative 
vote of at least two directors appointed by each Party . Therefore,  Daimler and Geely 
will jointly control the JV.  
2.3. Full function joint ve nture  
(8) The JV will have  sufficient own staff, financial resources and dedicated management 
for its operation and for the management of its portfolio and business interests. 
Furthermore, the JV will have a market presence, and is intended to operate on a 
lasting basis.  
(a) Geely and Daimler will contribute to the registered capital of the JV in cash, 
while Daimler will also contribute the “smart” brand. The JV will finance 
 
 
3 and operate its business as a stand -alone entity independently from the 
Parties and assume associated liabilities and risks on its own.  
(b) The JV will have its own dedicated management t eam to carry out the  day-to-
day operation of the JV. The management team will be organised as follows: 
one Chief Executive Officer (“CEO”) appointed by Geely, one C hief 
Financial Officer (“CFO”) appointed by Daimler, one Chief Operating 
Officer (“COO”) appointed by Geely, and one head of sales, marketing and 
brand management appointed by Daimler . 
(c) The JV may select its own employees, has no obligation to employ staff from 
the Parties, and will b ear the cost of seconded employees. When an employee 
of either party holds concurrent posts in the JV, the cost of that employee 
shall be borne by the JV and the respective party pro -rata to the time 
allocated by the employee be tween the JV and the party . 
(d) There will be links between t he JV and its parent companies  and b oth parent 
companies will provide support to the JV in the manufacturing and 
distribution of the Target Vehicles . However, the JV will pay its parent 
companies fees at arms -length basis for the services received. The purchase 
price for contract products payable by the JV to Geely will be determined on 
a cost -plus pricing basis and the JV will keep full control of th e process. 
Indeed, t he JV will be responsible for commercial negotiations of all the 
procurement contracts with suppliers (including Geely) of the raw materials 
and parts , and will define and control quality targets for the Target Vehicles.  
(9) In view of the above, the JV is full -functional.  
3. EU DIMENSION  
(10) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million4. Each of them has a n EU-wide turnover in excess of 
EUR 250 million, but they do not achieve more than tw o-thirds of their aggregate 
EU-wide turnover within one and the same Member State. The notified operation 
therefore has an EU dimension.   
4. RELEVANT MARKETS  
(11) The activities of the Parties overlap horizontally and on a number of markets for 
(i) the manufacture  and sale of new passenger cars and, in particular, the sub -
segment of mini (A -segment) cars and small (B -segment) cars5 and the sub -segment 
of pure battery electric vehicles (“BEV”), (ii) the wholesale of new passenger cars 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
5   According to the information provided by the Parties, the [internal name of a target vehicle] belongs to the 
A-segment, and the [internal name s of target vehicle s] to the B -segment in view of their body style, 
vehicle length, price threshold and customer basis. According to the Parties, this segmentation normally 
corresponds to the equivalent segmentation made by IHS ( IHS is a service provider for i. e. auto motive 
market segment forecasts ).  
 
 
4 and light commercial vehicles ( “LCVs”), and (iii) the retail sale of new passenger 
cars and LCVs .  
(12) Despite multiple overlaps, t he Transaction gives rise only to two horizontally 
affected markets: (i) wholesale of new passenger cars in Sweden and (ii) retail sale 
of new passenger cars in  Sweden.  These markets are mainly affected due to the 
strong position of Volvo in Sweden (Volvo belonging to Geely).6  
(13) There is no vertically affected link resulting from the Transaction.7 
4.1. The market for the m anufacturing and supply of passenger cars and L CVs 
4.1.1.  Product market definition  
(14) The Commission has in the past considered separate markets for the manufacturing 
and supply of passenger cars on the one hand, and of commercial vehicles on the 
other hand .8 
(15) For passenger cars, the Commission's decisional practice has defined  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) multipur pose vehicles . 
(16) The Commission has previously considered the further sub -segmentation of the SUV 
segment into (i) small, (ii) medium and (iii) large SUVs but ul timately left the 
question open . Furthermore, the Commission left open 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 .9 
(17) For LCVs, the Commission 's decisional practice  has considered but ultimately left 
open whether to further sub -segment LCVs into vehicles (i) up to 3.5 tons and (ii) 
between 3.5 -6 tons . The Commission also ultimately left open whether pick -up 
trucks can be considered passenger car s given that they can be purchased for private 
use and can transport both goods and people . 
(18) The Parties do  not contest the above market definition.  
                                                 
6  Whilst the Parties’ activities overlap in : (i) the manufacture and supply of small (B -segment) passenger 
cars at national or EEA -wide level, (ii) the manufacture and supply of battery electric vehicles (“BEV”) at 
natio nal or EEA -wide level, (iii) the wholesale of new passenger  cars and LCVs at EEA -wide level and at 
national level , and (iv) the retail sale of new passenger  cars and LCV at EEA -wide level, at national level , 
or at local level, none of these overlaps lead t o affected markets since the Parties’ combined market share 
remains below 20%, with the exception of two plausible markets: (i) the wholesale of new passenger  cars 
and LCVs in  Sweden  and (ii) the retail sale of new passenger  cars and LCV in Sweden. Since t hese 
markets are not affected, they will not be further discussed (with the exception of the two markets in 
Sweden where the combined market share exceeds 20%).  
7  In all markets vertically linked, the Parties’ market shares remain below 30% . Overall, the only affected 
markets under any plausible  product and geographic  market definition  are treated in Section 5.  
8  Case M.8449 Peugeot / Opel  (2017) para  6; COMP/M.1519 Renault / Nissan (1999); COMP/M. 2832 
General Motors / Daewoo (2002); COMP/M.5219 VWAG / OFH / VWGI (2008); COMP/M.5518 Fiat / 
Chrysler (2009).  
9  Case M.8449 Peugeot / Opel (2017) paragraphs 7 -16. 
 
 
5 4.1.2.  Geographic market definition  
(19) In previous decisions , the Commission has ultimately left open whether the 
geog raphic scope of the markets for manufacturing and supply of passenger cars and 
LCVs is EEA -wide or national in scope .10 
(20) The Parties do not contest the above market definition.  
4.1.3.  Conclusion on the market definition  
(21) For the purposes of this decision, the Commis sion considers that the question of the 
exact product and geographic market definition can be left open, as the Transaction 
does not lead to affected markets under any plausible product or geographic market 
definition . 
4.2. Wholesale distribution of new passeng er cars and LCVs  
4.2.1.  Product market definition  
(22) In previous decisions ,11 the Commission has distinguished between the wholesale 
and retail distribution of motor vehicles . The Commission has also considered 
whether the wholesale distribution market should be further segmented between 
passenger cars and LCVs, leaving this question open . 
(23) The Commission also concluded that a further segmentation would not be necessary 
by type of cars  (e.g. mini cars, small cars, medium cars, etc.) because  manufacturers 
normally d istribute a model range which covers different market segments under the 
same distribution channel . 
(24) The Parties do  not contest the above market definition.   
4.2.2.  Geographic market definition  
(25) The Commission has considered in previous decisions that the market could be 
EEA -wide or national in scope.12 
(26) The Parties do not contest the above market definition.  
4.2.3.  Conclusion on the market definition  
(27) For the purposes 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 
under any alternative market defini tion.  
(28) The only affected market, whether considered at EEA or national level is the market 
for wholesale distribution of new passenger cars and LCVs in Sweden.13 
                                                 
10  Case M.8449 - PEUGEOT / OPEL  (2017) para 26.  
11  Case M.9462 - EMIL FREY GROUP / AUTOCOMMERCE / AVTO TRIGLAV / AC -MOBIL , paras 11 -14; 
Case M.8449  Peugeot / Opel  (2017) para 28.  
12  Case M.9462 - EMIL FREY GROUP / AUTOCOMMERCE / AVTO TRIGLAV / AC -MOBIL , paras 19 -21; 
Case M.8449 Peugeot / Opel  (2017) para 32.  
 
 
6 4.3. Retail distribution of new passenger cars and LCVs  
4.3.1.  Product market definition  
(29) At retail level, v ehicles are sold to final customers via independent or vertically 
integrated retailers (“dealers”). In previous decisions,14 the Commission has 
considered a further distinction between the wholesale and retail distribution of new 
passenger cars on the one h and and of new LCVs on the other hand, leaving this 
question open.  
(30) The Commission concluded that a further segmentation would not be necessary by 
type of cars.  
(31) The Parties do  not contest the above market definition . 
4.3.2.  Geographic market definition  
(32) In previous  cases, the Commission has left open whether the market for retail 
distribution of new passenger cars is EEA -wide, national or local.15 
(33) The Parties do not contest the above market definition.  
4.3.3.  Conclusion on the market definition  
(34) For the purposes of this deci sion, the Commission considers that  the question of the 
exact product and  geographic market definition  can be left open, as the Transaction 
will not give rise to serious doubts as to its compatibility with the internal market 
under any alternative market d efinition .  
(35) The only affected market, whether considered at EEA, national or local level is the 
market for retail distribution of new passenger cars and LCVs in Sweden.16 
5. COMPETITIVE ASSESSMEN T 
5.1. Wholesale distribution of new passenger cars in Sweden  
(36) The ma rket shares  of the parties and their competitors were the following in the last 
year:  
  
                                                                                                                                                      
13  Form CO, paragraph 178.  
14  Case M.9462 - EMIL FREY GROUP / AUTOCOMMERCE / AVTO TRIGLAV / A C-MOBIL , paras 15 -16; 
Case M.8449 Peugeot / Opel  (2017) para 34.  
15  Case M.9462 - EMIL FREY GROUP / AUTOCOMMERCE / AVTO TRIGLAV / AC -MOBIL , paras 20 -21; 
Case M.64 03 Volkswagen / KPI Polska / Skoda Auto Polska / VW Bank Polska / VW Leasing Polska  
(2011)  para 28.  
16  Form CO, paragraphs 180 -181. 

 
 
8 competitors such as Renault -Nissan, Hyundai  Group , Toyota, BMW would continue 
to exert a competitive constraint over the JV.  
(41) Respondents to the market investiga tion considered that the Transaction has no 
negative impact on competition.18 
5.3. Other plausible market segments  
(42) The Parties have either provided exact markets shares showing no affected markets 
arise or confirmed that to the best of their knowledge no affect ed markets arise under 
any plausible market,19 other than the affected markets analysed in Sections 5.1 and 
5.2. In particular , as regards potential local markets in the retail of passenger cars 
and LCVs, the Parties have confirmed that to the best of their  knowledge local 
market shares do not deviate significantly from national ones . 
(43) Even if the Parties' best estimates were to be wrong, and some locally affected 
markets arose, the Transaction will not give rise to a significant impediment of 
effective compe tition at local level. In all Member States, the national market shares 
are a good proxy for local strength given that all major car manufacturers distribute 
and sell cars nationwide (all major car manufacturers have wide distribution and 
retail networks i n addition to independent retailers). As regards the potential wider 
wholesale or retail markets which encompass passenger cars and LCVs, the 
Commission notes that neither Geely (Volvo) nor the JV are active in the LCV 
segment. Therefore, widening the mark et from passenger cars would merely dilute 
the combined market shares . 
(44) In addition, the Commission notes that respondents to the market investigation 
considered that the Transaction has no negative impact on competition . 
6. CONCLUSION  
(45) 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 Regul ation and Article 57 of the EEA Agreement .  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice -President  
                                                 
18  Non-confidential replies to questionnaire to Customers and to Competitors.  
19  Form CO, paragraphs 178 -181.