February Witnesses Increases in Romania Car Sales

Car sales in Romania rose sharply in February. Sales of imported cars registered a jump of 74% whereas the sale of homemade cars dropped 18%.

Association of Automobile Producers & Importers of Romania says that the car sales in Romania increased from 14,887 to 18,704 in the month of February. The sale of imported cars increased 74% to 12,210 cars whereas the sales of locally made cars fell 18% to 6,494 units.

Sulfina Barbu, Romanian Environment Minister said, "Last month, that even after two years of soaring new-car sales, the average model in Romania is more than 13 years old". She added that the government would be extending a program, which will encourage the owners of cars, which are older than 12 years to buy new ones. In news published in Bbj.Hu., Barbu said, "The government will give 3,000 lei ($1,160) to 16,500 owners of older cars this year to help them junk the vehicles and buy models that meet stricter emissions standards",

Many factors play a role in this rise in car sales: the appreciation of Leu (which resulted in lowering prices in lei, whereas the price of vehicles are expressed in Euro usually), introduction of flat income tax (which resulted in high net income for many), reduction in the loan interest rates, scrapping incentive (30 million Lei - around EUR 850 - to scrap an old car above 12 years of age and buy a new one). IBM.com

The powerful economic growth and the increase in income have also played a role in increase in car sales in Romania. The car importers came out with more advertisements, publicity campaigns, and promotions which resulted in the growth of car sales in the country.

Research analyst at RNCOS says that the automotive industry of Romania is not believed to be influenced by the slump in the local market, as Romanian car manufacturing would become progressively export-oriented.

Experts anticipate new challenges for the Romanian market in the year 2007. With the rising inflation, the interest rates are expected to hike and this can result in more pressure on the car market. EU accession, which is expected in the year 2007, might result in an increase in the growth of cheap used vehicles.