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Cars: Coface: Romania, the most successful automobile ECE region, next to Slovakia and Czech Republic
The automobile manufacture in Romania, next to that of Slovakia and the Czech republic are the most successful in the ECE region, as a result of massive foreign investments, but the dynamic of these increases cannot continue endlessly because of the possible market saturation, show the conclusions of a specialised analyses made by Coface and released on Wednesday.
Recent data show that last year, 3.6 million vehicles were manufactured in Eastern Europe, the equivalent of 2% of the overall EU production.
In ECE countries included in the Coface analysis there are 33 automobile factories, of which most were set up with direct foreign investments and with Skoda and Dacia the region has two powerful local brands which have survived in the competitive world market, according to Coface.
“The number of vehicles manufactured in the ECE region has doubled in the last 10 years. Slovakia, the Czech Republic and Romania have been the most successful, where car manufacture has trebled or even had grown four times. However, mention should be made that the dynamics of increases cannot continue endlessly because of the possible saturation of the market”, commented Grzegorz Sielewicz, Coface economist for ECE.
According to the study, automobile factories in the ECE region remain dependent on foreign demand, despite the increased dynamics of car sales generated by local customers.
“The ECE region was able to attract direct foreign investments, because of attractive labour force costs, the geographic proximity to Western Europe, educated labour force and the improvement of the business environment. Manufacturing vehicles and transport equipment has measurable effect on the result of ECE economies. For some countries in the area, such as Hungary, Czech Republic and Slovakia the sector represents about a tenth of overall production. It also generates a significant number of jobs, employing over 850,000 workers in 2013 in the 6 countries analysed. Automobile exports represent a significant part of foreign trade in the ECE region. In Slovakia, for instance, they represent 25% of overall exports of the country.
The manufacture of ECE automobiles is exposed to foreign demand, and the majority is sent to foreign markets. However, the present position shows that the euro zone - the main export market- is elastic and generates better prospects. Owing to these positive tendencies in the euro zone and in other European countries, the vehicle demand has been growing,”the Coface report shows.
Coface analysis covers the automobile sector of ECE countries where significant volumes of cars are produced in the Czech republic, Hungary, Poland, Romania, Slovakia and Slovenia.
The most important car manufactures in Romania are Dacia and Ford. Dacia was taken over by Renault in 1999. Relaunched in 2004 with Logan models, Dacia became in 8 years an important player in the European car market.
AT the same time Ford began production at the Craiova factory in 2012 and launched the B-Max model, the first product of the factory and the first 5 star EuroNCAP Romanian car. In 2012 Ford started manufacturing the EcoBoost engine at Craiova.