ANNOUNCEMENT 13 Jul 2011

In July 2011, the government of Germany announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



English translation of SA.32169
http://ec.europa.eu/competition/state_aid/cases/241375/241375_1269046_33_2.pdf
German Original source: SA.32169
http://ec.europa.eu/competition/state_aid/cases/241375/241375_1269045_32_2.pdf

Affected countries extracted from Top25 car manufacturing countries :
http://oica.net/category/production-statistics/


Inception date: 13 Jul 2011 | Removal date: 31 Dec 2016
Still in force

Financial grant

On 27 December 2010, the German authorities notified the EC on their intention to grant regional aid to the Volkswagen Sachsen GmbH.

Volkswagen Sachsen GmbH is a subsidiary of the Volkswagen Group, one of the largest car manufacturers worldwide. Germany intended to support the above mentioned firm by providing direct grants as well as an investment premium (para. 3 , Letter from the EC to Germany, Brussels 13.07.2011) . The invested state money would be used to change the production process from the so-called 'platform' based manufacturing to a 'module' based manufacturing process.

The total aid amounts to EUR 94.7 million and will be disbursed over a period of 6 years, between 2011-2016.

The EC states that "The financial support in the form of a direct grant and an investment allowance given to Volkswagen Sachsen GmbH and the Volkswagen Sachsen Immobilienverwaltungs GmbH will relieve these companies from costs which they would normally have had to bear themselves. Therefore, these companies
benefit from an economic advantage over their competitors. (para. 32 , Letter from the EC to Germany, Brussels 13.07.2011).


Furthermore, the commission concludes that "The financial support in the form of a direct grant and an investment allowance by the German authorities will be given for an investment resulting in the production of vehicles. Since this product is subject to intensive trade between Member States, the support given is likely to affect trade between Member States. (para. 33 , Letter from the EC to Germany, Brussels 13.07.2011).

A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.

AFFECTED SECTORS