Dacia delivers on pledged losses

Romanian carmaker Dacia, held by French group Renault, continues to register losses, however within the expected confines. Q1 losses were worth 217.6 billion lei (about 9 million euros), but turnover tripled to 1,553.3 billion lei (about 63 million euros), while the output decreased by 38% over the same period of time.

This evolution can be grounded on giving up stock-production, as the company operated sales only from the existing piles.

During the first three months of the year, Dacia sold 9,578 cars, of which almost half (4,751 units) were Dacia SupeRNova.

Dacia officials forecast 265 million euros in turnover this year, up 28% against the previous year. The company’s officials were contacted by Ziarul Financiar, but declined to comment on the Q1 financial results.

Dacia estimated 40 million-euro losses for this year. Last year, the company registered 1,449 billion lei in losses, that is 60 million euros, while in 1999 the level of losses stood at 314 billion lei.

Dacia produced 55,000 cars in 2000, though the plant’s capacity amounts to 120,000 units. This situation points to the population’s low purchasing power and the impossibility to operate exports because of the cars’ low quality.

Dacia shares have not stirred the investors’ interest on the Bucharest Stock Exchange, as the stock price has sunk very low lately. Dacia shares were traded at a price ranging between 470 and 495 lei over the last trading session.

Analysts feel that the main reasons for such a low quotation were not the company’s losses but the repeated share capital increases, which decreased the quotas held by minority shareholders, who therefore stopped buying shares.

Renault took over Dacia in 1999, paying 50 million dollars and pledging to invest several hundreds of millions of dollars in technology updating.

The French company has invested about 89.1 million euros so far in updating the gear box of the existing models, while another 156.5 million euros might be invested this year. Dacia investments in technological and infrastructure updating might stand at 120 million euros this year.

Dacia will change the entire range of products by 2004, as the company intends to start producing the famous model X90 worth 5,000 euros. According to Dacia officials, some 200,000 Dacia cars will be produced in 2005 at an international level, while their number will go up to 750,000 in 2010.