Though moderate, investments invigorate local car market


Two Western European car suppliers might invest EUR 75 M – EUR 80 M in Romania.

Two Western European car companies are interested in entering the Romanian market, announced Constantin Stroe, president of the Association of Automotive Manufacturers of Romania.  “The two prospective investments are not spectacularly high, i.e. approximately 75 or 80 million (editor’s note – euros), but they will find a market here. They seek collaborations with national producers who do not possess the necessary technique and the resulting number of jobs would be around 170. We should not turn our backs on it. These are rare opportunities that have recently come up in the Romanian car industry,” Constantin Stroe, president of the Association of Automotive Manufacturers of Romania (ACAROM), stated yesterday at a conference on re-launching the local car industry organized by Ziarul Financiar. The two companies are from Western Europe, Stroe pointed out, without disclosing additional details.
The car industry segment reported a 20 percent increase in turnover last year, to EUR 15.9 billion. Dacia and Ford combined generated a turnover of EUR 5.2 billion, and car part suppliers covered the remaining amount. Over 600 companies with over 200,000 employees are active in this industry branch. Thirteen of the twenty world leading car distributors manufacture car parts in Romania, according to data provided by ACAROM. “Negotiations for a collective labor contract between the Automobile Dacia board and the unions may be finalized this week,” Constantin Stroe stated further in his capacity as vice-president of the company’s Board of Directors. He also mentioned an agreement has been reached to “reasonably raise” wages. Dacia operators earned a gross average wage of RON 4,428 last year, compared with the national level of RON 2,224 and the gross average wage nationwide for car operators of RON 2,682.
Imported cars, raw material for ‘Remat’
Also present at the conference, Nicolae Sorescu, director of Radacini Grup car division, stated that Romania has lost EUR 852 million in the last three years in unpaid VAT by second-hand car importers. “If the import trend does not change, we will have enough raw materials for Remat for another 20 years. Car imports should account for no more than 25 percent of the cars on the market,” he added.  In turn, Adrian Gearap, president of the Environment Fund Administration (AFM), noted that Romania has a low purchasing power, which is why there are close to 3.5 million cars manufactured over 8 years ago that would be eligible for the ‘scrap car’ scheme.  “(…) In 2012, one ticket was priced at RON 3,800 and the price was maintained in 2013. One of the major changes we implemented in the scheme this year was to increase the nominal price of one ticket to RON 6,500,” Gearap concluded.

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