Romanian PM Confirms State Aid For Dacia, Car Parts Suppliers

Romanian outgoing premier Calin Popescu Tariceanu on Thursday confirmed information about a government bailout plan to help French carmaker Renault’s local unit Dacia and four car parts suppliers support production.

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“It is true, we (the government – e.n.) have adopted a measure (…) through which we will grant state aid to five major investment projects. The total amount exceeds EUR100 million,” Tariceanu told a press conference.

The authorities in Bucharest prepare to unveil a EUR123.3 million bailout plan for the local auto industry, ministerial sources told Mediafax Wednesday.

The companies to be granted state aid include Dacia (EUR15.4 million) and auto parts suppliers Delphi Diesel Systems Romania (EUR24.7 million), KS Atag Romania (EUR27.9 million), Calsonic Kansei Romania (EUR17.9 million) and Honsel (EUR37.4 million).

Dacia asked for state aid to diversify its product range by manufacturing a new vehicle, which requires EUR91.1 million investments between 2009 and 2010.

The Romanian car industry took a severe hit over the past months, while Dacia had to halt production thrice so far on falling demand.

Job losses and activity shutdown for car parts suppliers are further effects of the economic crisis in the auto industry.

Early December, the Romanian government decided to triple the pollution tax on used cars to boost new car sales and aid the local auto industry.

The act, enforced December 15, triggered a series of protests nationwide.

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