Renault Aiming To Boost Production At Pitesti From 350,000 Units In 2008 To 400,000 Units In 2009

July 31, 2009 - PRLog -- The Romanian automotive market and industry have experienced an abrupt slowdown following the international credit crunch. The third and fourth quarters of 2008 saw a fall in automotive sales growth, which markedly worsened in Q109, according to the Automotive Manufacturers and Importers Association (APIA). The decline in domestic car sales was marginally offset by a rise in the commercial vehicle segment. The slump in domestic sales was related to the introduction of the new environment tax, as well as restrictions on credit. Overall automotive sales in 2008 fell to 324,080 units in total, representing a fall of 11.7% year-on-year (y-o-y), with car sales down 14.1% while commercial vehicle sales rose by 2.0%. The decline has been caused by a moderation in economic growth and a reduction in the availability of credit, feeding into the performance of the country's automotive industry. Nevertheless, export sales increased some 26% in 2008, buoyed somewhat unexpectedly by sharp increases in sales to Germany, Italy and other West European markets.

Despite a depressed local market, automotive production managed to strengthen slightly in 2008. Overall output was up 1.5% y-o-y to 245,308 units, car output was down 1.3% to 231,056 units, but commercial vehicles were up 87.4% to 14,241 units. Automotive growth is lower than the 13.2% recorded for the whole of 2007 as Renault's Romanian subsidiary Automobile Dacia approaches full capacity. This modest growth was due to the rise in exports counterbalancing the sudden decline in domestic sales.

Nevertheless, the speed of the slowdown has been such that the outlook for 2009 is not at all promising.

There are pressures facing Dacia in terms of rising wage costs and the effect of medium-term appreciation of the leu on prices on export markets. Even so, the Romanian automotive industry will be boosted by planned capacity expansion over the next five years. Renault is aiming to boost annual production capacity at Pitesti from 350,000 units in 2008 to 400,000 units in 2009. Renault is hoping to launch the new Mégane in Romania in 2009, followed by the Laguna Coupé. The company has so far relied on its existing models, such as the Symbol and the Mégane Sedan, for most of its sales increase.

Operating as a wholly imported brand in Romania, Renault sold 32,308 vehicles in 2007, giving it a market share of 9.2%. However, a 30% y-o-y decline in sales to 22,073 units brought the manufacturer's market share down to 7.1% in 2008. As such, the commercial manager for Renault Romania, Jacques Daniel, revealed that the company is looking to achieve an 8% market share in Romania, although it has not revealed any sales target for this year.

http://www.companiesandmarkets.com/r.ashx?id=B2ES03TDA82620

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