The romanian car market

“Diminishing purchasing power and the austerity measures taken by the government are the major factors that have a negative impact on the car market.

"The massive import of second- hand cars has led to a drop in new car sales“, said the same industry representatives.

They added that the government programme offering incentives for scrapping old cars saved the domestic car industry.

The 2010 edition of the car scrapping programme started in February, had a difference as compared to previous years: the owner receives a voucher in exchange for the scrapped car, which can be used cumulatively with three others when buying a new car.

By late August, this program helped sell 38 thousand new cars out of a total of 76,100 cars sold during the first eight months of 2010.

Compared to the same period in 2009, the market dropped by 26.5%, according to the Association of carmakers and Importers of Romania.

Car sales went down 29.2 % to 68,300 units, while utility vehicle sales went down by 26.1 % to 7,300 units.

The carmaker with the best sales on the Romanian market continues to be Dacia, with almost 22,500 cars, followed by Renault, Ford and Volkswagen. Car imports went down by 28.6 %, to 52,000 units.

It should be noted that car production and exports recorded significant increases, first because of the performance of the Dacia Renault Group of Mioveni and the Craiova based Ford factory.

Between January and August, the car production in Romania went up by 25.1 % reaching 220,500 units, while exports went up by 30% to reach 200 thousand cars.

But what is new at the Dacia factory?

As sales manager Fabrice Cambolive told us, sales went up mainly thanks to figures recorded in France and Germany.

The first Dacia SUV, the Duster, which was launched in the spring of 2010, sold very well in the West, and in France people had to wait in line up to 6 months to get one.

The production of the model is growing, from a pace of 20 cars per hour in July to 35 cars per hour in early 2011.

Here is Mr. Fabrice Cambolive with further details about the prospects of the Romanian market in 2010.

“Apart from Romania, as you know, most countries stopped their scrapping incentive schemes starting in April this year, and we have registered market drops of 7 to 9% as compared to last year.

"In Romania, the first quarter was divided in two: the first half was a difficult time for the market, after the application of the pollution tax for Euro 4 cars, followed by a progressive comeback in March, on account of the scrapping incentive scheme implemented by the Government.

"As a result, we logged good monthly sales, especially in June. Currently we are being affected by the VAT hike (from 19% to 24% starting July 1), since customers rushed to buy cars before the increase occurred.

"It’s clear we will have lower sales, although we hope sales will go up as a result of the ongoing scrapping incentive scheme, alongside medium-term measures”, said Fabrice Cambolive.

Equally noteworthy is Renault Technologie Roumaine’s opening of the Titu Technical Car Test Center (some 60Km north-west of Bucharest) on September 15th.

The Center is built on a 330 hectare area, and has so far taken up 166 million euros of the 500 million euro investment capital.

The Titu facility currently has 100 testing stations that can simulate extreme conditions, testing resistance to cold, exposure to sunlight or rain.

In addition, the centre boasts ten types of track with a total length of 32 km which enable engineers to study vehicle road behaviour.

As regards the other car giant, Ford, which in 2007 purchased the Craiova car-factory, the American company is currently one year behind as regards the production plan initially announced, because of the economic crisis.

Its latest production plan includes a class B prototype to reach the market in 2012, replacing the current manufacture scheme for the Transit Connect model.

Ford representative also said that approximately 80% of the car production in the factory in Craiova would be export-bound, while the overall investment program of Ford would stand at 765 million euros.