Romanian Carmaker Dacia Halts Prod Again For Two Weeks As Of Jan 26

"Following continued dramatic decline in auto markets, especially in Romania, Dacia will halt production in the period Jan 26 – Feb 8, 2009," Dacia said in a press release.

Employees to be put on technical unemployment will receive 85% of their gross wages, according to the 2008 collective labor contract.

"Dacia is forced to resort to this measure to adapt its output to the decline in sale orders following drops on auto markets. This decline is particularly sharp in Romania, the carmaker’s main market, where it sold only a third of its output in 2008. In December 2008, Dacia sold 3,622 units on the local market, down 55% compared to December 2007," the release added.

Dacia just resumed activity Monday morning after a one-month production halt, also due to declining demand.

The carmaker said the decline in the market is due to the effects of the financial crisis, which lowered people’s access to loans, and massive imports of second hand cars.

"The Romanian auto market is suffocated by imported used cars. In December 2008, used car registrations reached 54,712 units, up 471% compared to December 2007. (…) Basically, starting with November 2008, three second hand vehicles were registered for each new vehicle,” Dacia said.

The company added the Romanian auto market saw a dramatic decline in new car sales starting October 2008.

After a 30% decline registered in October 2008 compared to October 2007, new car sales decreased 55% in November compared to November 2007 and 53% in December compared to December 2007, the carmaker added.