Romania’s car production accelerates past 500,000 for the first time

Romania’s car production accelerates past 500,000 for the first time
/ bne IntelliNews
By Iulian Ernst in Bucharest January 17, 2023

Romania’s automobile industry boasted its best year in 2022 when both of the two car factories Dacia and Ford produced roughly 20% more units compared to 2021, surpassing altogether, for the first time, the 500,000-unit threshold.

The outlook indicates robust growth and deep transformations within the national automobile industry. The region's dependence on the automobile industry is seen as a vulnerability, but among Romania's industries, automobile production is perhaps among the least dependent on outsourcing from parent groups therefore more likely to generate value-added locally. 

Renault's CEO Luca de Meo recently admitted in an interview that the profit margin at Dacia is three times larger than that at its parent company Renault (15% versus 5%). 

Ford Otosan, the new owner of the Ford factory in Craiova, plans to invest €490mn in the plant over the next three years to expand production growth and play a key role in Ford’s electrification journey in Europe. 

Dacia will also join the electrification trend, with a hybrid Jogger already launched and a new version of the all-electric Spring soon on the market. Separately, Renault's engine factory in Romania (Renault Mecanique Romania) will be a driving force behind Renault's Horse project for the internal combustion division. 

Despite the disruption of the distribution chains that continued last year and the semiconductor crisis, Romania's production rose by 21% y/y to nearly 510,000 units in 2022. For comparison in 2004, when Renault launched the first brand-new model after it took over the factory in 1998, Romania produced less than 100,000 units – Dacia Solenza and Logan and Matiz, a model produced by Daewoo at the factory now owned by Ford.

In 2022, Dacia assembled nearly 315,000 units and Ford over 195,000.

Notably, compared to the year 2019 – when the last record in terms of aggregate production was marked (490,000 units) — Dacia produced fewer units in 2022.

Ford, in contrast, boosted its output by one-third compared to 2019, thanks to the launch of the Ford Puma model.

Dacia has also launched new models such as the seven-seater Jogger – but its entry into the electric vehicles market was pursued through the import of a model produced entirely in China, Spring, which quickly became popular.