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The demand is fragmented and inelastic. The consumer’s preference is based on: geographic location, price, after sale networks, second hand value, power of the engine and comfort level. The consumer’s preference for buses is more concentrated on local service network, reliability and lifetime costs. Change in customer’s profile. For trucks we see seven big producers on European market within which DaimlerChrysler is the leader. As for buses the main other suppliers are Neoplan and Bova, MAN, DAF Bus, Van Hool and Dennis. Volvo and Scania appear to be each other’s closest competitors and closest substitutes pursuing similar market strategy: both high quality, loyalty and well-spread network services. Identification of 3 Market segments according to vehicles weight. Because of technical differences, the categories are not considered as interchangeables by consumers. The proposed merger concerns the market segment of heavy trucks. 3 categories of buses: buses, Intercity buses, Touring coaches (with each category provides a different service). These products are heterogeneous due to their difference in technical characteristics and distinct buyer groups. Because purchasing is done on a national basis and the distribution and service network constitute a barrier to import penetration, there are several distinct national markets. Therefore concerning the market geography the commission focused its attention on Northern Europe (Sweden, Denmark, Finland, Ireland, UK) because it is where both Volvo and Scania have more market power.the national markets constitute the relevant geographic market, because price levels differ between Member States, local consumer preferences, purchasing is done on a national basis and technical configurations vary between Member States. In as we can see in the figure below,in Sweden there is virtually no competitor to Volvo and Scania, with the exception of DaimlerChrysler, which has a very weak position corresponding to approximately 6% of the market. This market structure has been broadly similar for a very large number of years.

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