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November 20, 2019
BUSINESS

Ford could produce new model in Craiova

Ford could announce this autumn the production of a new model at its plant in Craiova. The Ford EcoSport model, which is currently imported to Europe from India, could be produced in Romania alongside the B-Max model. However, the decision depends on talks that Ford representatives are currently having with Government representatives. The Americans allegedly brought up the idea of a new state aid, however their main demand concerns the infrastructure.
According to the local press, the negotiations on the future of Ford’s Craiova plant no longer centre on what other model could be produced there alongside the B-Max. The model has already been selected.
Ovidiu Cioroianu, president of the Ford trade union, states that “the possibility of producing the EcoSport model in Craiova is being analyzed. We are expecting the company to make, later in September, the announcement concerning the place where this auto vehicle will be produced.”
The cost calculations and the timeliness of introducing the second model are complicated, so it would not be a surprise if the start of the EcoSport mini-SUV’s production does not start overnight but rather toward the end of 2017.
Although EcoSport is a car designed on the basis of the same B-platform, like the B-Max Ford already produced in Craiova, the new model will not hit the production lines before the network of component suppliers is up to notch.
Ford hopes that Romania’s road infrastructure will improve by 2017. Craiova plant’s trade union members state that because of the poor infrastructure it is cheaper for the company to import the EcoSport model from India instead of assembling it in Romania.
The privatization contract required Ford to gradually raise its production in Romania to 300,000 units. An initial threshold of 250,000 units should have been attained by the autumn of 2011. That goal however was never met.
According to APIA data, the Craiova plant assembled less than 53,000 B-Max models last year. Meanwhile, the privatization contract received an addendum that eliminated the production thresholds. Thus, Ford avoided a fine and kept the EUR 75 M in state aid it had received after the privatization.
Ford is now allegedly conditioning the transfer of the production of a second model at the Craiova plant on obtaining a new state aid within the limit imposed by European regulations, which stands at 20 per cent of the value of the investment.

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