ZF English

Government initiative likely to boost Romanian car market

30.05.2001, 00:00 12



The Minister of Public Works, Transports and Housing Miron Mitrea at the end of last week said he was planning to generalise the disposal system operated by Dacia to boost car sales.

Pitesti-based carmaker's system, similar to the ones used in many western countries, consisted in 10 million off the purchase price of a new car in case the buyer produced evidence of having disposed of an old one.

Both carmakers and importers on the Romanian market welcome this initiative, feeling it will lead to a 20-25% growth of the car market.

"Automobile Dacia supports any attempt of the state institutions to encourage the Romanian automotive market, such as the initiative at hand," Dacia officials told Ziarul Financiar.

"This initiative is no news to us. APIA (Association of Carmakers and Importers in Romania) has carried out talks with officials within the Transport Ministry and Finance Ministry to have this initiative, used by many European countries in the past, applied in Romania, as well," Marius Carp, APIA executive manager, told Ziarul Financiar.

"This is one of those situations when everybody stands to gain, the state, the client, the local carmaker and even the importer or the dealer. It's simply a win-win situation, and it's not us saying that, we're speaking from the experience of the other European countries," the APIA official concluded.

"Such a campaign should be backed by the state's direct involvement, however, even though the disposal bonus operated by Dacia was born from the company's own funds."

Recycling used cars is common practice in Western European countries, with most of the large companies running massive advertising campaigns to convince the clients to return old models to the dealers.

The campaigns started by granting a loyalty reward for those clients returning a 1980 Opel model, for instance, with its value considered discount when purchasing a 1990 Opel model.

At present, most EU countries provide various incentives - partial exemptions or tax cuts, certificates for the large vehicle makers and for their dealers in case they play an active part in recycling used models.

The current European practice is that in case a car which has been used for less than six years is returned, the companies recover the parts that can still be put to use, they recondition them and reintroduce them into the productive circuit.

In case the car returned is older than six years, it is taken apart and then destroyed, with the materials being recycled.

According to APIA executive manager, such an initiative would generate positive effects on the Romanian economy in general.

The increase in the number of cars would generate a chain reaction as to the amount of spare parts and accessories, and, why not, a drop in unemployment by an increase in the number of the people working in this industry.

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