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Porsche Faces EU Probe Over EU43.7 Million German Subsidy

Porsche AG faces a European Union probe over a 43.7 million-euro ($53.7 million) subsidy from the German government to help it build a compact sports-utility vehicle.

The European Commission said it will review whether the German grant is necessary to encourage the company to build its new Macan model in Leipzig. Regulators will also check to see if the state support hurts competition.

The EU investigation doesn’t change Porsche’s plans to produce the car in Leipzig, said Hans-Gerd Bode, a spokesman for Porsche AG.

“The construction work has already started and if the grant is not approved, we will pay for it ourselves,” Bode said.

Porsche’s Macan project will cost 521.6 million euros, the EU said in an e-mailed statement. The company plans to start selling the new model in 2014.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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