Romanian Carmaker Dacia To Consider Other Measures If Production Halts Don’t Unfreeze Mkt

"We’re waiting for the spring, as January and February are generally weak in terms of sales. If we need to, we’ll halt production for a few days in January and February and if that still doesn’t unfreeze the market, we’ll consider other measures as well,” Fourmont said without giving further details.

About the government’s recent decision to triple the car tax for second-hand cars and to resume the country’s car park renewal program as of January 1, Fourmont said the measures "could fix one of the two causes that led to the decline of the Romanian auto market”.

He said the Romanian auto market declined 50% in November, and Dacia sold “little over 4,000 cars in Romania” in this period, and sales are expected to continue decreasing.

"The first reason that led to the decline of the Romanian auto market is the invasion of 50,000 second-hand cars and second, clients’ difficulty in getting bank loans. We are witnessing an abrupt decline in auto markets across Europe, and although our market share is on the rise, this decline is affecting us too,” Fourmont said.

Earlier Monday, Dacia decided not to extend 620 temporary labor contracts that expire late December, confirmed a new cease in activity, between December 11 and January 11, and announced it is switching to a slower production.

Because of lower demand both on the local and international markets, Dacia already halted production for 22 days this year. The carmaker resumed activity Monday, but will halt production again starting Thursday, Dec 11, until Jan 11.

Starting Jan 12, Dacia will slow down its output to 1,085 cars per day from the current 1,360 cars per day.

Dacia sales on the local market decreased 52.3% on the month in November, to 4,698 cars, a record decline for the carmaker. In the first 11 months of the year, the carmaker’s sales decreased 13.5% on the year, to 81,097 cars.

Dacia also lowered its 2009 investment budget by 40%, to EUR150 million from the initially planned EUR250 million. The carmaker said money to improve working conditions and the quality of services and products won’t be affected by the cut.