BRUSSELS - The European Commission wants to know whether BMW used Hungary as a lever to pry £158 million (euro 240 million, $251 million) in aid out of the British government to help rebuild Rover's aging Longbridge, England, factory.
'Once you talk about public aid you have to consider alternative sites,' said Karel Van Miert, EU competition commissioner in an interview here.
Rover officials said they considered locating the factory in Gyor, Hungary.
'It must be established if it was a game, using the Hungarians to put pressure on the British government for maximum aid,' he said. 'That is not the kind of game we are prepared to accept.
'In the Rover case, we need to see if BMW was really considering an alternative site,' he said.
'There has been information and indications from the Hungarian side that that was not the case.'
Van Miert is expected to meet with British authorities on 7 July to begin reviewing the Rover aid case.
Brian Johns, spokesman for BMW and Rover, said: 'We are totally confident the agreement meets the requirements of EU policy.'
BMW believes Birmingham, the major city closest to the Longbridge plant, fits EU requirements as a depressed area qualifying for state aid, Johns said. If the EU approves the deal, BMW will begin the £1.5 billion process of rebuilding the ancient plant.
The company plans to build the new Mini and the replacements for the Rover 200 and 400 at the factory.