A joint venture that was proposed only some time ago between the auto glass repair and automobile distribution company, D’Ieteren, and Volkswagen Financial Services AG has just been approved by the European Commission. The proposed joint venture is going to see the birth of an entity known as Volkswagen D’Ieteren Finance, which is supposed to handle a number of financial aspects of the retail of Volkswagen’s cars in Belgium.
The venture between the auto glass repair and auto distribution giant and the automobile maker is going to be stepping on someone else’s turf, which is why the EC had to check whether or not it would also be stepping on someone else’s shoes in that process. The Commission’s Merger Regulations were used to evaluate whether or not the new entity (Volkswagen D’Ieteren Finance) would have the potential to deny other players a good chance at competing with it, due to the power of the two companies involved in the merger.
As is typical of discussions and evaluations of this type, the main questions were how many players are involved in that specific area of the market and what the current structure of the market is. The former relates to the health of market activity in terms of competition, as regulations of this type are in place to prevent unhealthy monopolies from forming and thus limiting the number of options for consumers as well as other groups involved. The latter is the starting point used by analysts and experts to make projections of the economic fallout of the new venture’s existence in a descriptive form.
After careful consideration, the EC decided to give the two major auto companies the go-ahead to form the new entity. The two companies are reportedly already getting talks underway to finalise the venture. The product of their joint efforts shall undoubtedly be significant to the industry, given the strength of the two companies by themselves. Volkswagen is one of the largest, most recognisable car brands in the world, and its Financial Services subsidiary is the actual part of the group that handles the international financial services of the company or brand.
As for D’Ieteren, it is a Belgian company that is most known for its services in auto glass repair and replacement as well as automobile dealerships. The former is through the other, immediately recognisable company that is under its control: Belron, the leading company in the world when it comes to auto glass repair and replacement services. The latter is through D’Ieteren Auto of Belgium. The company is not restricted to these ventures, however, as it also deals in the car rentals market with its majority ownership of Avis Europe, one of the most known brands for car rentals throughout the world.
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