Global economic woes have reached Romania to affect Renault’s shining-star low-cost brand and a steel maker.
Both Dacia and Arcelor Mittal Hunedoara said they would temporarily halt production due to a sharp drop in sales.
“Given the sharp fall of car markets and despite its success on external markets or its increasing market share, Dacia has to cease production from 20 November to 7 December 2008,” the automaker said in a statement.
“The aggravation of the financial and economic crisis in October reflects negatively on the car market, including Romania.
“The new cars market fell [year on year] by 30% in Romania, by 40% in Spain, by 23% in Great Britain, by 22,7% in Sweden, by 18,9% in Italy, by 8% in Germany, and by 6.2% in France.
“The trend will most probably go downwards in the following months.
“The global car market decreased 9% [year on year] in October 2008 while exports increased by 20.2%.
“Dacia exported 23,794 units in October 2008, and 142,124 units during the first 10 months of 2008, of which 35,329 units were sold in France.
“Consequently, although Dacia was a commercial success on external markets, its rising market share cannot compensate for the dramatic fall of the European car markets.”
Dacia said Romanian new car sales fell 30% last month to 23,525 units and Dacia sales were 6,664 units (down from 9,094 units in October 2007) for a 28% market share.
It said the fall was due to the credit crisis (60% of its new vehicles are bought with credit or leasing) and by the an increase in used vehicles imported since new laws allowed this.
In July-September 2008, used car sales were 93,996 units versus 123,842 units in all of 2007. Most of the imported used cars were over 10 years old.
“Massive importations of used cars lead to job cuts in the field of production and sales of new cars,” Dacia said.
The automaker said packing of CKD kits for vehicle assembly in other countries would continue to operate during the production shut-down.
Employees would receive 85% of their total gross salary during the closure.
Arcelor Mittal said its factory in Hunedoara, in western Romania, would close in November and December, due to the drop in demands for steel on the international market, but the company told news agencies it would not cut jobs.
Arcelor Mittal Hunedoara employs about 1,200 people and its workers would get 75% of their salaries during their shut-down.