Romania”s entry in the European Union is likely to endanger what has been the most dynamic market in Romania for a number of years – the new car market. Of those countries that entered the EU last year, Romania best resembles Poland, in the view of most economic analysts.
The Romanian authorities have around 18 months to prevent Romania”s transformation into the “car disposal site” of Europe, as it happened to Poland in its first year of EU membership. Poland”s formal EU integration last year plunged its new car market into a crisis that it is not expected to escape from any sooner than 2007-2008.
After the restrictions for used car imports in Poland were lifted, imports grew from less than 100,000 in 2003 to more than 800,000 in 2004, with almost three quarters of the used cars imported from EU member states being more than 10 years old. While prior to May 1, 2004 – the official date of Poland”s entry into the EU – it had been impossible to register cars that did not meet Euro-2 pollution standards or higher, after this date, any car registered in an EU member state could be re-registered in Poland, regardless of the car”s age. At the other extreme, the Czech authorities, on entering the EU, chose not to “adjust” their legislation to fit in with EU rules, choosing instead to maintain restrictions over imported used cars.
This move has been criticised by the European community, however, which is recommending the Czech government revise its policy in this area. Romania”s closest neighbour, Hungary, chose a compromise formula, maintaining a system of excise control, based on engine capacity and the so-called ecological taxes that increase in proportion with the level of pollution caused each car – which for some very old cars can reach thousands of euros. This means that an owner wishing to import a ten to fifteen-year-old car from Germany, for example, could still do so without risking taxes and excise duties that pushed the cost of the car close to that of buying new.
With one-and-a-half years to go, the Romanian authorities do not appear overly worried about the coming avalanche of used cars from Western Europe. The only parties to have brought up the matter so far are the importers and dealers of new cars.