Automotive along with retail trade and IT, Romania’s economy engines, Euler Hermes study reveals

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The automotive industry is one of the main pillars of the Romanian economy, employing more than 150,000 people and contributing to 47 percent of the exports in 2016, according to Euler Hermes study.

Year after year, the automotive industry enjoys strong profitability, registering last year an impressive growth rate of 9 percent versus 2015, while the global average advanced by 1.6 percent. At this rate, annual increases of 6-7 percent are expected by 2020.

The sector has so far been driven by automakers, Dacia-Renault ranking 11th in Europe, with almost 360,000 units in 2016. Currently, most of the growth comes from the car parts and components manufacturers.

Regarding the suppliers’ market, it includes both its own production facilities, such as Daimler, as well as numerous contractors such as Delphi, Draexlmaier, Leoni or Continental, but also small local entrepreneurs, which are in turn suppliers for major manufacturing companies.

The study points out that the big players on the market are not transparent about estimates and financial data, and bank financing is usually provided at group level under favorable conditions as compared to local ones.

As regards the domestic market development, the automotive industry appreciated in Q4 2016 for new vehicles (-1.7 percent in Q1-Q2 to 32.500 units), but it fell sharply due to a slowdown in used cars sales, up to a total of 101,500 units sold (-15.2 percent from Q1-Q2).

2016 was one of the best year in the last decade, with a 17.4 percent increase in the number of motor vehicle registrations to 510,000 units, of which about 22 percent (115,000 units) were new cars.

The financial leasing market increased by 25 percent in 2016 to EUR 2 billion, of which almost 77 percent were automobiles and light commercial vehicles. Companies accounted for 97 percent of the total financial leasing customers, followed by individuals (2 percent), and the public sector by (1 percent). The fleet of operational leasing cars increased by 8 percent to 60,000 vehicles in 2016 (about 13 percent of all new car registrations), with similar growth expected for 2017.

The total turnover of the automotive sector in 2016 exceeded EUR 20 billion, driven by exports, as the local market is relatively small and centred on used motor vehicles.

The main automotive companies operating in Romania are Dacia (turnover of EUR 4.2 billion in 2015), Ford (EUR 0.8 billion) and Volkswagen Group only as trader and distributor, with turnover of EUR 0.4 billion.

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