Vj-59/1999/7

FORD MOTOR COMPANY / VOLVO PERSONVAGNAR HOLDING AB

According to the contract, made between the Ford Motor Company (hereinafter: Ford) and the Swedish Volvo AB, Ford purchases the shares of Volvo Personvagnar Holding AB (hereinafter: VCC) that is 100 per cent property of Volvo AB. By this transaction Ford acquires exclusive control rights over VCC and also undertakings, controlled by VCC. Complying with the obligation of notification the transaction was notified by Ford to the European Commission and also to the interested competition authorities, including the Hungarian Competition Office.

On the Hungarian market the Ford Hungaria Manufacturing and Trading Ltd distributes cars and trucks and manufactures spare parts of cars, while the Ford Credit Hungaria provides financial services in connection with car purchasing. Both subsidiaries are fully owned by the parent company. The Volvo Auto Hungaria, fully owned by the VCC, is a car distributor undertaking on the Hungarian market.

The Hungarian car market is characterised by strong competition of 35 car-manufacturers, where the market share of Ford is 8.3 per cent and of Volvo is 0.9 per cent. Within the categories of large and sport cars they have relatively high market shares (21.1 and 30.3 per cent respectively) but the joint market share of these categories in the whole car market is very small (1.8 per cent). The arguments of the parties were based on this small market share stating that the transaction does not have significant effect on the competition, does not create a dominant position and does not impede the formation and development of effective competition. The number of undertakings will not be reduced by the planned concentration since the Ford intends to keep separate the subsidiaries of VCC from the Ford companies.

Accepting these arguments the Competition Council authorised the transaction. (The parties got an authorisation also from the European Commission.)

May 17, 1999. Budapest

Fógel Jánosné dr. sk. előadó
dr. Bodócsi András sk.
dr. Sólyom Eszter sk.
Ágoston Marika