Eliminating Import Duties On South Korean Cars Would Ruin Auto Industry – Romanian Carmakers

The Free Trade Agreement, signed by the European Union and South Korea on October 15, stipulates eliminating all tariff barriers for trades between the EU and South Korea and is expected to be enforced in the second half of 2010. Under the agreement, taxes on vehicles with engines bigger than 1.5 liters will be gradually eliminated over the next three years upon enforcing the agreement, while taxes on vehicles with engines smaller than 1.5 liters will be eliminated over the next five years.

„Eliminating taxes for South Korean cars translates into price cuts of up to EUR1,000 per car and clearly affects carmaker Dacia, which will not lower prices,” said Stroe, who is also vice-president of Romanian carmaker Dacia.

Stroe pointed out that imports of South Korean cars to Romania will double until eliminating all trade duties, adding the agreement brings advantages to several economic fields, such as agriculture or the pharmaceutical industry, yet, it brings inequities between the two parties as regards vehicle trading proceedings.

According to data from the Romanian Association of Carmakers and Importers, South Korean cars account for 12% of total cars on the Romanian auto market, except Chevrolet, which is also produced in South Korea.

South Korean auto industry is also present on the Romanian market with car brands Hyundai, Kia and SsangYong, with the first two brands in top 10 of best-sold foreign cars in Romania in 2009. Hyundai cars rank first with 8,882 units sold until September 2009.