Romania and Bulgaria reportedly have updated their offers and are willing to provide higher financial support for a new Volkswagen factory that originally looked like it would be built in Turkey.
The German car maker had postponed its investment in a new car factory in Turkey, after Ankara's military intervention in Northern Syria and a shareholder of the group even suggested that VW should reconsider its plans to invest in Turkey, romania-insider.com noted.
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This put Romania and Bulgaria back in the race for this important investment. The two countries had been considered alongside Turkey and Serbia for the VW project.
Volkswagen plans to spend about EUR1bn on a new car factory in eastern Europe to produce 300,000 units of the VW Passat and Skoda Superb per year.
Bulgaria is willing to offer state aid of EUR260m for the new plant, double what it initially offered (EUR135m), according to local media.
Meanwhile, Romanian authorities said they had resumed talks with Volkswagen and even went to Germany for direct talks with the company, according to official sources quoted by Profit.ro.
Romania's offer to Volkswagen hasn't been made public.
However, former Arad mayor Gheorghe Falca said the western Romania city was prepared to provide 1,100 hectares of land for the new Volkswagen factory and the whole ecosystem around it (suppliers and contractors).
Earlier, the head of the Romanian car producers' association (ACAROM) Gabriel Sicoe, said Romania must approach the automaker directly and provide allowances in line with the European Union's regulations.
"We will do our best [to convince Volkswagen]," outgoing prime minister Viorica Dancila told the Ziarul Financiar daily.
Romania currently has two car factories both located in the south: Dacia (Renault) in Pitesti and Ford in Craiova.
Both were developed on sites of former car factories built during the communist regime.
Romania since hasn't been able to attract any greenfield investment despite the development of the local automotive industry overall.
Thus, in the absence of a third manufacturer, Romania's car production will not exceed 700,000 units.
Romania was the eighth biggest car producer in the European Union in 2018 with close to 472,000 units, far behind Czech Republic (1.4m units) and Slovakia (1.03m), but ahead of Hungary (461,000) and Poland (365,000).
However, Hungary may apass Romania in the future, after attracting a new BMW factory.
Hungary produces more expensive cars, such as Audi, Mercedes, and Suzuki, with higher added value.
