Outline · [ Standard ] · Linear+ Romanian Car Market Is Booming, In the first quarter of this year

*In the first quarter of this year, Romanian car dealers sold more vehicles than ever before. The unprecedented increase is being attributed to the new flat tax, as well as economic growth. On 29 December 2004, just one day after being sworn in, the new Romanian government decided to radically change the tax system. Since 1 January, profit taxes have been reduced from 25 per cent to 16 per cent, and the graduated income tax was replaced with a 16 per cent flat tax. Both employees and business executives suddenly realised they had more money to spend -- and auto showrooms have been a favourite destination. "I now earn almost 200 euros more each month. I can afford the payments for a 15,000-euro brand new car," explained Stefan Petru, an IT specialist from Bucharest. "I was planning to buy five new cars for my company. But the new taxation system will allow me to get two more," said Marian Albu, the owner of a real estate agency. RAZVANphoto.jpg More than 56,000 vehicles (about 48,300 cars and 8,000 commercial vehicles) were sold in Romania in the first quarter of the year, at a total of 600m euros. The figure sets a record, representing a 62 per cent increase compared with the first three months of last year. About 32,000 of these cars were locally produced brands -- including more than 24,000 Dacias, a 128 per cent increase from 2004. Another 24,000 were imports, the preferred brands being Renault, Skoda, Volkswagen and Peugeot. While the flat tax largely explains this unprecedented buying spree, last year's 8 per cent economic growth rate (expected to be about 6 per cent this year) probably also played a role. The 10 per cent appreciation of the national currency exchange rate to the euro and US dollar made cars more affordable too, as their prices are fixed in foreign currencies. Dacia sales were helped by the launch of the new Logan model, manufactured by the Dacia Renault factory in Pitesti, a city of 150,000 people. The Logan's release gave a powerful boost to the domestic production industry. Local factories, which produced 26,500 cars from January to March 2004, registered an 82 per cent rise in production during the same period this year. Exports experienced the most impressive growth, from 3,100 to 10,500 -- a 233 per cent increase. However, the high demand has also created headaches for dealers. There are too many clients for a limited number of personnel and showrooms, as well as a limited number of cars. "When the sales over-run the forecast up to 20 per cent, it is not a problem, but if the difference reaches 40 per cent or even 50 per cent, the delivery time for a car might be longer than 30 days," said Radu Cristian, commercial manager of Peugeot dealer Trust Motors. The boom has defied predictions that growth in 2005 would be a moderate 10 per cent to 15 per cent. Last year had been the best ever for the Romanian auto market, with more than 180,000 vehicles sold. If the first quarter trend continues, however, nearly 300,000 will have been sold by the end of 2005. source: Webpage

*In the first quarter of this year, Romanian car dealers sold more vehicles than ever before. The unprecedented increase is being attributed to the new flat tax, as well as economic growth.

On 29 December 2004, just one day after being sworn in, the new Romanian government decided to radically change the tax system. Since 1 January, profit taxes have been reduced from 25 per cent to 16 per cent, and the graduated income tax was replaced with a 16 per cent flat tax. Both employees and business executives suddenly realised they had more money to spend -- and auto showrooms have been a favourite destination.

"I now earn almost 200 euros more each month. I can afford the payments for a 15,000-euro brand new car," explained Stefan Petru, an IT specialist from Bucharest. "I was planning to buy five new cars for my company. But the new taxation system will allow me to get two more," said Marian Albu, the owner of a real estate agency.

RAZVANphoto.jpg

More than 56,000 vehicles (about 48,300 cars and 8,000 commercial vehicles) were sold in Romania in the first quarter of the year, at a total of 600m euros. The figure sets a record, representing a 62 per cent increase compared with the first three months of last year. About 32,000 of these cars were locally produced brands -- including more than 24,000 Dacias, a 128 per cent increase from 2004. Another 24,000 were imports, the preferred brands being Renault, Skoda, Volkswagen and Peugeot.

While the flat tax largely explains this unprecedented buying spree, last year's 8 per cent economic growth rate (expected to be about 6 per cent this year) probably also played a role. The 10 per cent appreciation of the national currency exchange rate to the euro and US dollar made cars more affordable too, as their prices are fixed in foreign currencies. Dacia sales were helped by the launch of the new Logan model, manufactured by the Dacia Renault factory in Pitesti, a city of 150,000 people.

The Logan's release gave a powerful boost to the domestic production industry. Local factories, which produced 26,500 cars from January to March 2004, registered an 82 per cent rise in production during the same period this year. Exports experienced the most impressive growth, from 3,100 to 10,500 -- a 233 per cent increase.

However, the high demand has also created headaches for dealers. There are too many clients for a limited number of personnel and showrooms, as well as a limited number of cars. "When the sales over-run the forecast up to 20 per cent, it is not a problem, but if the difference reaches 40 per cent or even 50 per cent, the delivery time for a car might be longer than 30 days," said Radu Cristian, commercial manager of Peugeot dealer Trust Motors.

The boom has defied predictions that growth in 2005 would be a moderate 10 per cent to 15 per cent. Last year had been the best ever for the Romanian auto market, with more than 180,000 vehicles sold. If the first quarter trend continues, however, nearly 300,000 will have been sold by the end of 2005.

source: Webpage

Damn! If this trend will continue, we will feel sufocated in our own cities in 2-3 years...
I don't see a word about the costs of the booming of the romanian car market in this articole! We should pay attention to this matter too...

It's time for the alternative-fueled cars ...
Is there anybody that realises this???

It's time for the alternative-fueled cars ...
Is there anybody that realises this??? 

I think LPG (Liqufided Petroleum Gas) is the best alternative for the beggining. All those hydrogen and fuel cell technologies are a bit underdeveloped right now.

yeah right, exactly at the end of the first quarter the government imposed higher indirect taxes in order to compensate reduced tax income, so it's normal that the trend will not simply continue or did the writer of the article really think that the government gave free "Caritas" presents??
And yes, driving a car is nice, but still if infrastructure ( public transport included)
doesn't develop in the same pace? Well fortunately I'm far from Bucuresti where the biggest problems will be, but it would be nice if there would be good journalists to show people things like this on TV.

I`m glad to have a little contribution

in romanian economy boom

Traffic is a big problem in Romania as roads are in poor condition and parking lots in the big cities are kind of scarce.
Not everybody can afford his own garrage.

Traffic is a big problem in Romania as roads are in poor condition and parking lots in the big cities are kind of scarce.
Not everybody can afford his own garrage.

Well, parking lots in the big cities are kind of scarce anyware in the world. So Romania is not an exception, unfortunately.

Traffic is a big problem in Romania as roads are in poor condition ...

Guys,don`t far cry.

We didn`t manage to solve Nato-bombing holes yet

It's time for the alternative-fueled cars ...
Is there anybody that realises this??? 

Simple ansewr! Large petrol companies are spending many resources to keep away from us (drivers) alternative fuel! They are afraid of going broke!

We didn`t manage to solve Nato-bombing holes yet 

It's going to happen, just give jour politicians some time. I suppose they have more important matters to solve

It's going to happen, just give jour politicians some time. I suppose they have more important matters to solve 

Yes. getting as much money as they can in their pockets. Ooops, it's kinda like romanian ones.

Why are the roads in Serbia awful,with too many holes?

The reason is Nato bombardment

It`s a joke

Anyway,if we start talking `baut politicians, I`m afraid it will lead us

into trouble water…