ARIS: Car manufacturers choose Romania for lack of alternative

Investments will drop in the coming years, however, sources added. “To increase efficiency, producers are already focusing on less expensive locations, close to the heart of Europe’s car industry in Germany, France and Italy,” ARIS officials said. Hungary and the Czech Republic are no longer attractive because of high labor costs, while Slovakia has no room for further investments.
Bulgaria lacks a tradition in car manufacturing, while the Ukraine does not provide sufficient guarantees, making Romania the only alternative left in the region, sources told Business Standard.

On the other hand, representatives of Romania’s Automobile Manufacturers Association (ACAROM) say increasing labor costs could make Romania less attractive for investors in the auto industry, as of 2009.

Two major car manufacturers have operations in Romania - Renault, which purchased local maker Dacia in 1999, and Ford, which in September 2007 acquired controlling interest in local Automobile Craiova and is to start activities there this year.

Daimler and General Motors have also indicated their interest in starting production in Romania, while Mitsubishi is considering opening a car parts factory here.

Several major car parts producers operate in Romania and further investments in the field were announced since the signing of the Ford deal last year.

The local auto industry registered a cumulated turnover worth €7.2 billion in 2007, 28 percent higher year-on-year.