Daewoo Romania management thinks Ford will not close down the Craiova-based plant

Ford will not close down the Craiova-based Daewoo plant if it takes over the South-Korean conglomerate, but further investments depend on the Romanian Government’s policies, given that the current treatment applied to foreign investors might trigger negative consequences, Daewoo managers said at the end of last week.

“The group that will take over Daewoo Motor, no matter which one – either Ford or General Motors or anybody else – will make this move for the company’s market and the models’ quality, in order to continue sales and production,” Daewoo Automobile Romania president W.H. Cho said. U.S. automaker Ford at the end of June was selected as exclusive negotiator for taking over the South-Korean company Daewoo Motor. Ford offered 6.9 billion dollars for Daewoo Motor and its subsidiaries, as well as for its Ssangyong Motor division.

“Ford specialists who have visited the Craiova-based factory understood that its technological level was competitive. We believe that we should continue producing the current models,” the company’s vice president Ion Ion said.

Cho explained that investments in Romania were temporarily halted and added that the group that would take over Daewoo Motor was supposed to re-evaluate the investment programmes of all subsidiaries. “We want to assure Ford Group that our activity in Romania is very prosperous and has good future perspectives,” Cho added.

Daewoo Automobile Romania proposed to the Government that taxes should be cut down by 50% for cars having a cylindrical power bellow 1,000 cubic centimetres, with a view to encouraging small power cars’ purchase, the company’s managers said on Thursday.

The only models produced on the Romanian market that belong to this category are Daewoo Tico and Matiz. Dacia has around 1,500 cubic centimetres and Aro is completely ruled out. At an international level, all big producers have such models, the most famous being Fiat Seicento and Ford Ka.

“This measure will lead to a decrease in car prices, which will generate an increase in the number of sold automobiles. At the same time, it will boost the industry,” Cho explained. He added that encouraging these models’ sale would lead to solving traffic and parking problems, emphasising that the stipulations of this initiative were not confined to Daewoo activities.

Daewoo officials believe that annual savings of 105 million dollars can be obtained annually, by reducing fuel consumption. At the same time, savings worth 45 million dollars annually can be made as far as spare parts and equipment imports are concerned. Cho offered as examples several similar regulations applied in other European countries, such as Great Britain, where cars having engines of less than 1,100 cubic centimetres benefit from a 35% tax reduction. In France, cars with a power bellow 500 cubic centimetres benefit from a 50% tax reduction.