Passenger car production in Romania might reach EUR9-10bn this year, according to calculations of the business daily Ziarul Financiar. The two domestic car manufacturers, Dacia and Ford, could produce 500,000 units in 2019, if growth recorded in January-September (2% y/y) is maintained by the end of the year. Dacia made almost 30,000 cars in September and Ford nearly 7,600, so production in January-September exceeded 354,800 units. Although car demand in Europe weakened and Dacia was particularly affected by some worsening in its major markets like Germany and Italy, Ford might cushion potential deterioration after starting production of its new model Ford Puma in October, in our view.
We remind that Ford started production of a new model, B-Max in 2018 after investing EUR200m in its domestic factory’s expansion. Thus, Ford tripled its car production to almost 150,000 units in 2018 while the number of employees increased to about 4,500. Further on, Ford launched another model this autumn as it aims to boost production by 67% by 2020. Its target is to reach 250,000 cars produced annually as of next year. If Ford meets its objectives and Dacia keeps on moderately rising output, Romania could become an important cars manufacturer in the region. Besides, the country was in eighth place in the EU last year in car production in 2018, surpassing for the first time Hungary and Poland. The downside may come from external demand decline, as both producers sell more than 90% of output abroad.