Dacia carmaker's officials have stated that, after negotiations conducted by Romanian officials with experts at the European Commission, it appears that if the first registration tax is lowered (to the level the Government proposed last summer), Dacia's manufacturing and commercial operations, as well as the number of employees could be affected.
"The initial law draft would have led us to a situation like that in Poland, which in Dacia's case could cause a 50% drop in output. As a result, the reduction of Dacia's commercial operations by one third would cause us to lay off one third of the staff in the entire Dacia network, which employs about 150,000 people," Francois Fourmont, Dacia's chief executive, explains.
Poland, which did not impose any restrictions on the access of used cars like the Czech Republic and Hungary did, saw an inflow of 1,800,000 old cars in its first year after accession, 1,200,000 of which were more than 10 years old.
"The sales of Renault dropped by one third in Poland, along with the new car market, which stood at 350,000 units in 2003," Fourmont says.
If the registration tax is cut without additional restrictions being imposed so as to take into account how much pollution various cars generate, Romania will see an increase in the proportion of old cars in the total fleet. The car fleet in Romania, which stands at about 3.5 million vehicles, is comprised 25% of vehicles that are older than 20 years.
"They should find a solution to impose restrictions on Euro 2, 1 or even 0 vehicles that are purchased for 1,000 to 2,000 euros from abroad, because the Euro 3 and 4 vehicles did not have any trouble entering the market in the past," Fourmont said. More than 95,000 second hand vehicles were imported into Romania in 2006.
The Finance Ministry officials said that the tax would not be changed for the time being. They added that talks were being held around the technical components of this tax and not around its amount. However, the tax could be adjusted by including some environment-related component to it.
"After Parliament voted in July (when the amount of the first registration tax was approved i.e.), we decided to boost production; the investments would increase the production capacity from 200,000 to 350,000 units a year. At that stage, we made important decisions, decisions that we would not have made otherwise," Fourmont stated.
The French carmaker embarked upon the investment project in Pitesti prior to the summer of 2006, when Renault group chose to boost production capacity to meet the capacity of the market.
Dacia's chief executive says the intensive and extensive development of the production facilities of the plant in Pitesti will require up to 300 million euros for 2007.
"This year's investment budget stands at around 250-300 million euros, and the ongoing investments in Pitesti will turn this site into Renault's biggest centre worldwide," Francois Fourmont stated.
Dacia officials conclude that the investments made by suppliers since 1999 when Renault took over should be worth about as much as those made by the carmaker.
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