EC to investigate Slovenian state aid to Renault subsidiary Revoz

Brussels, 3-7-2013 — /europawire.eu/ — The European Commission has opened an in-depth investigation to examine whether Slovenian plans to grant public financing to car maker Revoz, d.d., a subsidiary of Renault S.A of France for an investment project in the Novo Mesto region are in line with EU state aid rules. In particular, the Commission will verify whether the positive effects of the project for regional development outweigh the distortions of competition triggered by the public support. The opening of a formal investigation gives interested third parties the possibility to comment on the proposed measure. It does not prejudge the outcome of the investigation.

Commission Vice-President in charge of competition policy Joaquín Almunia said: “The Commission welcomes aid to encourage investment projects in disadvantaged regions. At the same time, such investments must not do more harm to competition than they help the region concerned, especially in sectors with overcapacity.”

In 2011, Slovenia notified plans to offer Revoz d.d. a €40 million direct grant for an €300 million investment project for the production of two car models (the new Renault Twingo and the new Smart 4 seater). These two models belong to the small city car segment of the passenger car market which is currently in significant absolute decline. The investment is aimed at creating some 162 additional jobs in the Novo Mesto region which is eligible for regional aid as an area with significant unemployment and a below average standard of living (Article 107(3)(a) of the Treaty on the Functioning of the EU (TFEU).

The EU regional aid guidelines (RAG) require the Commission to open a formal investigation for projects where an investment creates substantial production capacity on a market in decline (see IP/09/993). The Commission will now investigate whether the aid is necessary to trigger the investment or whether the project would also have been carried out without the aid. The Commission will also verify the investment cost for vendor tooling (i.e. dedicated equipment in suppliers’ factories for the manufacture of Renault parts) located outside the Novo Mesto region.

Background

The non-confidential version of the decision will be made available under the case number SA.33707 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.