Dacia may postpone 130m-euro investments

The domestic carmaker Dacia, says it might put off investments worth 130 million euros aimed at raising production capacities in case Romania was flooded with imports of used cars after accession, as has happened in the case of Poland.

“Our plans were to increase production capacities from 200,000 units per year at present, to 350,000 units in early 2008.

We may postpone our plans or even cancel them because we do not believe the new Fiscal Code draft will be able to halt the avalanche of used car imports. And, in this case, our car sales are likely to go down by half,” stated Francois Fourmont, chief executive of Dacia.

The draft related to the modification of the Fiscal Code, which will reach the Parliament this week, stipulates excises levied at the moment a car is bought be replaced by a registration tax.

Unlike the current situation, the tax will not be related to the price of the car, but to its cylinder capacity and the year of manufacturing, with more expensive brands being favoured from this point of view.

The new taxation system is a reaction from authorities, who want to avoid what happened to the Polish market, which was flooded by millions of used cars from Western Europe, after restrictions on car imports were dropped.

“We have two different examples. Poland, where no measures were taken and 1.7 million old cars came onto the market and Hungary, which embraced the idea of environment protection,” explains Fourmont.

“These moves are not enough to stop the avalanche of imports of used cars. In Hungary, taxes related to the import of a car older than 10 years are several times higher than the ones stipulated in this draft,” says Fourmont.

As a result, the new Fiscal Code draft depends on whether Romanian customers who have 6,000 euros, would prefer to buy a Logan or a car that is at least ten years old.

Should the draft come into effect, it will not be just used imported cars that have higher prices, but cars manufactured domestically, too. The only category that seems to draw an advantage from the draft is that of imports of high-capacity new cars.

“Another problem is that the production of Euro 4 cars is not encouraged.

“We were planning for the station wagon Logan to be launched this autumn to use Euro 4 engines, whose polluting emissions are half those of the Euro 3 engines. Unfortunately, we are forced to tell our customers they need to pay 500-600 euros more for this engine, and get a tax cut of 100 euros for doing this.

“Under such circumstances, we are seriously considering the possibility of launching the (station wagon) Logan Break with Euro 3 engines,” Fourmont also said. ionut.bonoiu@zf.ro