EC probes Jaguar Land Rover's Slovakia investment plans

European regulators have raised doubts about state funding for Jaguar Land Rover to invest in a car plant in Nitra in Slovakia.

The European Commission has launched an investigation into Slovakia's plans to grant €125m to Tata Motors-owned Jaguar Land Rover as it has doubts over whether this conforms to EU rules on regional state aid.

EC competition chief Margrethe Vestager said: "It is a good thing if public investment fosters economic growth in member states. However, we need to avoid harmful subsidy races between member states."

She said her department will carefully investigate if Slovakia's planned support "is really necessary" for Jaguar Land Rover to locate its investment in Nitra and whether it distorts competition or "harms cohesion" in the EU.

Jaguar Land Rover is investing €1.4bn in a 150,000-cars-per-year manufacturing facility in the Nitra region, which is an area eligible for regional aid under EU state aid rules.

Slovakia has claimed that without the aid the investment would have taken place in Mexico.