The Romanian Automotive Market in 2017

In the last decade, this market has had a sinuous evolution, with ups and downs related mainly to the worldwide economic crisis that started in 2008. The situation, however, is showing signs of recovery, according to Marius Tudor, general secretary of the Association of Automobile Producers and Importers, the APIA:

“The Romanian automotive market in 2017 has continued the recovery trend that started in 2014, but we are still far from the volumes in the peak year, 2007. We are still at around 35-38% of what was sold on the Romanian market in 2007. At that time we were selling around 300,000 plus automobiles, in 2017 it will probably be over 120,000. In the first ten months of 2017 we registered 13% growth, which is good, it is above the European average, and estimates are that by the end of the year we will find a growth of 10 to 12% as compared to 2016.”

We asked Marius Tudor what segments have seen the highest growth:

“It should be said that we have seen strong growth in the SUV segment, which had a growth of 26%, almost double than the other segments. Also, we have strong growth in sales of alternative propulsion automobiles, especially electric cars, which has practically doubled from the volume of sales in 2016, also due to support from the Environmental Fund, which amounts to 10,000 Euro for an electric car, and 4,500 Euro for hybrids. This major support is practically the highest in Europe, which reflects in sales. If this support stays the same in 2018, if the necessary funds will be there, I am convinced sales will go up. However, this support from the state is not sufficient. Maybe carmakers should themselves contribute, to provide further incentives, but the most important thing is to expand the charging network for these automobiles. There isn’t much use for these vehicles if you cannot charge them. The infrastructure should develop, and adapt in line with technological development.”

It should be said here that the figures for electric cars, even though they doubled, are still small compared to other major European countries, such as Germany and France, which sell thousands of units. Right now in Romania there are only a few hundred such vehicles.

The automotive sector is a major component of Romania's exports, and the growth trend is encouraging. Marius Tudor, general secretary of the Association of Automobile Producers and Importers, is here with details:

“The automotive industry is a major exporter, with significant contributions to the state budget, which is why it deserves special attention. We believe exports will continue to be high for the automotive industry, but also the parts and components industry, because in the end we have to bear in mind one important thing: many of the automobiles built in European states are built with Romanian-made components. Romanian exports of parts and components provide more revenue than exports of automobiles.”

One serious problem of the Romanian automotive sector is a rise in the number of registrations for used cars, especially since in February this year, the so-called environmental stamp was eliminated. Through this instrument, in order to be registered, automobiles were taxed, mainly based on how old they were, engine capacity, and the pollution they produced. Now, the lifting of this tax has opened the door to old, high pollution vehicles. Here is Marius Tudor once again:

“This year, old car registrations may reach 500,000, as compared to 300,000 last year. This means 70% growth, and more of them are older than ten years. And age is not even the problem, it is pollution. If last year 75% of Romanian imports were rated Euro 4, 5 and 6, now the percentage is around 60%, and their pollutant emissions are 8 to 10 times higher than the Euro 6 engine of today. Of course, the number of cars creates traffic problems, but the level of pollution they cause is a much more serious problem. That is because the pollution will affect public health, and this cannot be doubted. We have a study from the European Environmental Agency, last year, which, based on data from 2015, estimates that 28,000 people have died prematurely because of car pollution. At the same time, these imports of used cars have a negative impact on the new car market, especially those produced domestically. That is because used cars are generally imported by individuals involved in such commerce, which is not taxed. Because of that, they have competitive, unfair pricing as compared to the ones who pay taxes to the state. As a result, the state loses significant sums of money, because it does not tax this ultimately illegal commerce.” (Translated by C. Cotoiu)