Eyes on Junk Cars

Postat la 09 iunie 2009 16 afişări

The increasingly expensive loans and the uncertainty generated by the financial crisis have led to a collapse of car sales in Western Europe, as well as on developing markets, such as Romania. Dealers’ hopes now hang on a junk car. The Junk Car Programme.

In the late 1990’s, less than 10,000 new imported cars were sold in Romania per year, which were worth less than 100 million dollars. However, Barbara Cooks, at the time head of Ford for Central and Eastern Europe, had big plans for Romcar, importer of the brand. ”Ford was selling around 1,000 cars per year. In the autumn of that year (1998 i.e.), on her visit to Romania, Barbara Cooks set us a 8,000- car target for Ford, at a time when the entire market of imported cars amounted to less than 8,000 cars. Later the target was set at 8,000 cars, both new and second-hand ones,” said Viorel Niculescu, whom Ion Tiriac entrusted with building the Romcar business – Ford group’s importer – from scratch.

”The idea to start the programme only took shape after the year 2000, but there was never enough money in the state budget for the auto industry, which was not considered a priority. After Calin Popescu Tariceanu (former president of the Romanian Automobile Producers and Importers Association and owner of the company that imported Citroën to Romania) became Prime Minister, the money was found,” added Niculescu. Not surprisingly, in 2005, the first year when the car scrappage programme, known as ”Junk Car”, was first run, the success rate was above 97%, i.e. 14,607 cars were sold, out of the 15,000 discounted ones. 2006 and 2007 also saw above 90% success rates, while 2008, the last year in office for Prime Minister Tariceanu, saw the number of cars allocated for the programme almost double from a year before, exceeding 30,000 units.

With over 20,000 cars sold through this system (i.e. a 75% success rate), Romania became one of the leading markets in the region. But since then sales crashed, and have not recovered even after the Ministry of Environment extended the scrappage programme to 60,000 cars. ”It is hard to believe that more than 30,000 units will be sold by the time the programme ends, given the current circumstances. The programme is practically non-existent for dealers, because nothing is sold through it anymore,” says Alin Tapalaga, general manager of Porsche Inter Auto, the company which includes Porsche Holding’s own dealers. Launched in March, the programme reached a volume of around 13,000 cars sold towards the end of last week, according to the Environmental Fund Administration, with 20,000 cars being allocated for the first stage of the programme...

Urmărește Business Magazin

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