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Administrative timetable

Final report

26 January 2024: The SAU has published its report providing advice to DBT concerning the proposed subsidy to BMW. The report sets out our evaluation of DBTs Assessment of Compliance of its proposed subsidy with the requirements set out in the Subsidy Control Act 2022.?

• Final report (PDF, 252KB) (26.1.24)

Request from the Department for Business and Trade

12 December 2023: The SAU has accepted a request for a report from DBT for its proposed subsidy to BMW. This request relates to a Subsidy of Particular Interest.

The SAU will prepare a report, which will provide an evaluation of DBTs assessment of whether the subsidy complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.

Information about the subsidy provided by the Department for Business and Trade

The primary policy objective of this subsidy is to support the transition of the UK automotive manufacturing industry to the production of electric vehicles, chiefly in the form of funding for capital investment in new tooling, machinery and re-training or upskilling of employees in the sector.

In this case, DBT propose to provide BMW with a subsidy of 75 million by means of an exceptional Regional Growth Fund (eRGF) grant to convert its plant at Oxford to produce two new electric MINI models from 2026. Plant Oxford faces competition from another location. A grant of 75 million is necessary to achieve internal targets and make the Plant Oxford project viable. Due diligence concluded that there is a strong case for assistance and that 75 million represents the minimum grant necessary for BMW to proceed with the Oxford project.

If the project is not allocated to Oxford the plant would be left producing only internal combustion engine (ICE) models of the MINI for which demand is expected to decline as zero emission vehicles (ZEVs) gain market share and MINI moves towards becoming an all-electric brand. This would result in declining production volumes at Oxford, significant impacts on staff levels and suppliers, and consequently a substantive risk Oxford would not be in a competitive position to secure future vehicle production projects after ICE production ends in 2030.The subsidy will therefore help secure the future of the Oxford plant as well as BMWs Swindon pressing plant which supplies it. In addition to supporting the automotive sector in transitioning to the manufacture of ZEVs, securing the project will put the plant in a very strong position in terms of winning future product allocations.

At present, the UK automotive industry chiefly produces ICE vehicles, mostly for export (around 80% of output is for the export market), although the proportion of new electric and hybrid electric vehicles is increasing. However, with the banning of the sale of new ICE vehicles from 2035 the UK and moreover the sector itself faces a choice between allowing the sector to go into decline and in so doing losing major benefits in terms of employment, skills and trade; or to invest in the transition to electrification. The latter is DBTs preferred option, therefore in order to transition to the manufacture of electric vehicles and to maintain a competitive, viable manufacturing presence, both domestically and internationally, particularly in terms of trade the UK requires significant capital expenditure and investment in skills and re-training. The purpose of this subsidy is to support such investment.

Information for third parties

If you wish to comment on matters relevant to the SAUs evaluation of the Assessment of Compliance concerning DBTs proposed subsidy to BMW, please send your comments before 5pm on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Please send your submissions to us at SAU-BMWGrant2023@cma.gov.uk copying the public authority at Autounit@beisgov.onmicrosoft.com.

Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).

Notes to third parties wishing to make a submission

• the SAU will only take your submission into account if it can be shared with DBT. The SAU will send a copy of your submission to DBT together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with DBT using the email address provided above

• the SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance

• for further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit

Contacts

• SAU project team: SAU-BMWGrant2023@cma.gov.uk
• CMA press team: 020 3738 6460 or press@cma.gov.uk