Auto sales and manufacturing are both accelerating in Romania ahead of its anticipated accession to the European Union January 2007.
The French and Dutch rejection of the proposed EU constitution has slowed enthusiasm for enlarging the 25-member EU to 27 countries so quickly. Some EU member states are suggesting Romania and Bulgaria wait until 2008 to join, but Romanians remain upbeat.
New-car sales in 2004 rose 35.9 percent to a record 145,120 units and the pace in the first quarter this year was even more torrid. Romania's sales jumped 74.6 percent to 67,435 vehicles in the first three months of 2005. Riding its new Logan, Romania-based Dacia grabbed a 48.8 percent share of the market, followed by Daewoo Romania, Renault, Skoda and Peugeot.
"In terms of the overall market, we've had some very pleasant surprises," says Kia Motors spokesman Ionut Gheorghe in Bucharest.
Automakers are focusing on developing Romanian sales networks. Last year in the capital of Bucharest, Volkswagen, Porsche, Mitsubishi and Renault each opened at least one massive dealership, some with investments of up to E5 million. Kia opened its E3 million dealership in February and introduced its Sportage SUV in April.
Backed by parent Renault, Dacia is the mainstay of the Romanian auto industry. The French-designed Logan family sedan has taken off after production started in Pitesti last summer.
In March, Dacia had to stop production of the Solenza model after less than two years to create more room for the Logan. The goal is to push Logan production up from the 22,697 cars made in 2004 to at least 200,000 complete cars in 2006 plus an unspecified number of knockdown kits for assembly at other sites such as Russia and Morocco.
Dacia executives estimate that only 60 percent of the Logan's content is sourced locally, so there is an opportunity to add more parts from suppliers based in the country. ACOROM, Romania's automobile manufacturing association, expects component manufacturing to exceed the growth in car assembly through 2007.
But while Dacia is booming, the other two local automakers - Daewoo Romania and Aro - are slumping.
Daewoo Romania has a production capacity of 200,000 units a year in Crovia, but it made just 27,343 cars in 2004. The factory, 51 percent owned by Daewoo and 49 percent by the Romanian government, has the right to make cars from kits sourced from General Motor Daewoo Auto and Technology only to the end of this year.
Aro, Romania's manufacturer of rugged off-roaders, is still alive although it has stopped production. On May 26, potential US dealers gathered in Key Largo, Florida, to test drive pre-production Aro models.
The company, majority owned by Cross Lander USA, is preparing to launch its 244X Sports Recreation Vehicle in the US. The company aimed to debut models in the US by the end of this year but now doesn't say when the brand will be introduced there.