Romanian New Car Mkt Could Go Dn To Half In 2009, 100,000 Jobs In Jeopardy

"The Romanian auto industry sells some 300,000 units per year. The current market conditions indicate sales going down to 150,000 units for the entire year 2009, and 100,000 people of the approximately 220,000 people working in the industry might be out of a job," Valmar said during a press conference.

He added the country’s car tax, which is triple for used cars compared to July, helps the auto industry if the country’s car park renewal program, called ‘Rabla’, starts in February at the latest.

"Amending the decree passed in December (which tripled the car tax for old cars – e.n.) would be a crime for the auto industry. (…) The tripling of the tax is absolutely legal, it takes into account residual value and EU principles. We weren’t shown any docuembts that stated otherwise,” said Valmar, who is also the general manager of Porsche Romania, the largest importer in Romania.

On the other hand, he said the current tax is "an acceptable compromise, not ideal, not perfect" and said the tax calculation formula from before July 1, 2008 proved to be the most feasible from a technical point of view. That formula increased the tax depending on the age of the car, along other criteria, and the tax was lower for new cars.

In the first half of the year, Romania imported about 80,000 used cars, but imports skyrocketed to about 220,000 used cars in the second part of the year.

New car sales in Romania dropped 53% on the year in December, to 13,054 units, and were down 14.1% on the year in 2008 compared to 2007, to 270,995 cars, while the entire auto market saw a 11.7% decrease.

The Romanian government needs to amend the country’s car tax regime again, as the European Commission sent a notification end last year saying the tripled tax seems to go against EU laws.