InfoBusiness

 

Land transport vehicles and of agricultural equipment industry

(Synthesis of the study drawn up by the Romanian Trade Promotion Centre)

 

A. The industry of road transport vehicles

 

Foreword

 

     The industry of road transport vehicles plays a modest role within the Romanian economy, having in view that   this sector had a 3.0 % share of the industrial output (2003), a 3.2 % share of the personnel employed by the whole industry (2004) and a 0.5 % share of the total exports of the country (2004). A bigger share, namely 5.2 %, was registered in the total imports of the country (2004).

     The main assets of the sector consist of

-          exceeding production capacities;

-          qualified personnel;

-          professional research - design departments;

-          competitive domestic raw materials resources;

-          a specialized horizontal industry.

The main shortcomings of the sector consist of

-          obsolete equipment;

-          low productivity;

-          technological indiscipline;

-          use of old production technologies;

-          high prices of the components manufactured locally.

 

Production potential

 

     The number of the manufacturers within the sector increased permanently over the last period; if in 1998 there were 197 manufacturing companies, their number reached 352 in 2002, of which 43 (12.2 %) big ones i.e. with more than 250 employees, 32 (11.9 %) middle-sized ones i.e. having 50 – 249 employees and 267 (75.9 %) small ones i.e. with maximum 49 employees.

     The growth of the number of the manufacturers entailed the decrease of the production concentration within the sector; so, the cumulated turnover of the biggest five manufacturers declined from 60.7 % in 1999 to 52.2 % in 2003, whereas of the biggest 20 manufacturers from 84.5 % in 1999 to 67.7 % in 2003. However, the production concentration is still high, having in view that the 43 big manufacturers had in 2002 a 94.3 % share of the registered capital and 89.3 % share of the entire sector.

     Despite the increase of the number of the manufacturers, the total personnel employed by the sector scored a permanent descending trend, so that in 2004 it decreased by 21.1 % against 2000.

     The value of the output of the sector registered the following evolution between 2000 – 2004:

                                                                                                Billion lei, current prices

2000

2001

2002

2003

2004*

15,577.5

24,679.0

36,549.2

48,095.9

                            Source: N.I.S. Statistical yearbook of Romania, 2004

                                     * N.I.S.

 

      In kind, the output of road transport vehicles registered an increase over the 2000 – 2004 period, namely by 55.8 % in respect of town cars and by 46.5 % in respect of commercial vehicles. By contrast, the output of off-road cars decreased by 59.9 % and that of trucks by 68.5 %. The output of buses completely disappeared in 2004 after a continuous decline, whereas that of trolley buses, though very small, increased sharply.

     The industry of road transport vehicles, including the related components, encounters a deep crisis, generated by a series of objective and subjective causes, such as:

·         contraction of both home and foreign markets after 1990;

·         poor quality and fisability of the national vehicles;

·         delay in implementing the restructuring programmes of the sector;

·         faulty management;

·         shortcomings of the legislative framework.

 

Privatization

 

     The privatization process of the road transport vehicles industry unfolded very slowly and has not been completed so far.

     In respect of car production the privatization has been fully achieved, taking into consideration that the two domestic manufacturers namely Automobile Craiova and Automobile Dacia were sold to South-Korean Company Daewoo in 1994 and company Renault in 1999 respectively.

     In respect of off-road vehicles, trucks and other vehicles the privatization process encountered major difficulties, caused by the lack of atractivity from the part of the manufacturers of the mentioned items. However, at the end of September 2003 the company ARO Câmpulung and the company ROMAN Braşov were sold to the American company Cross Lander and to the Malaysian company Pesaka Astana respectively. However, at the beginning of 2005 the privatization of ARO Campulung proved out to be a failure, having in view that Cross Lander has not fulfilled its contractual obligations.

 

Investments

 

     After 2000 the investments in the road transport vehicles industry were quite important, the bulk of them being made by Renault group after taking control over Automobile Dacia. Between 2000 – 2004 this company invested 537 million dollars, of which 220 million for the manufacturing of the brand Logan alone.

 

Domestic consumption

 

     Over the 2000 – 2004 period the total sales of new road vehicles in the domestic market increased continuously, so that they were 2.15 times bigger in 2004 compared to 2000. The sales of buses increased the most (2.61 times), followed by those of town cars (2.19 times) and commercial vehicles (1.98 times).

     The share of the home-manufactured vehicles within the total sales in the domestic market registered a declining trend, whereas of the imported ones increased. Thus, in respect of town cars the share decreased from 78.2 % in 2000 to 59.8 % in 2004 and in respect of commercial vehicles from 69.4 % in 2000 to 57.5 % in 2004. 

     Between 1999 – 2002 the number of the cars in traffic kept on growing in respect of town cars and trucks and stagnated in respect of buses.

 

Foreign trade

 

   The weak development of the domestic industry of road transport vehicles, reflected in its incapacity of covering  the demands of the local market in number and assortment, entailed the import of a sizable number of road vehicles, which widely exceeded the exported ones, generating a permanent deficit of the foreign trade balance of such articles (see table below).

                                                                                                        Million USD

       Items

 

2000

2001

2002

2003

2004

43B5ses

(87.02)

Export

      0.2

       0.1

      0.1

     0.4

0.1

Import

    13.7

    16.5

    18.6

    26.0

75.1

  Balance

  - 13.5

  - 16.4

 - 18.5

  - 25.6

- 75.0

Cars

(87.03)

Export

    43.5

    66.9

    67.3

    58.4

118.0

Import

  112.7

  221.1

  284.6

  423.7

1,205.6

  Balance

   - 6.2

- 154.2

- 217.3

 - 365.3

-1,087.6

Trucks

(87.04)

Export

      3.8

      1.9

      4.9

      8.3

7.6

Import

    57.6

    89.6

  105.9

  176.6

422.8

Balance

 - 53.8

 - 87.7

- 101.0

 - 168.3

- 415.2

       Total

Export

    47.5

    68.9

    72.3

    67.1

125.7

Import

  184.0

  327.2

  409.1

  626.3

1,703.5

 Balance

- 136.5

- 258.3

- 336.8

- 559.2

 -1,577.8

            Source: National Customs Administration

 

     Between 2000 – 2004 the foreign trade balance was in deficit in total and by chapters alike; however the contribution of the three components i.e. cars, trucks and buses to the overall deficit was different from one another, namely: cars – 68.9 %, trucks – 26.3 % and buses – 4.8 %.

     As for exports, the cars represented the most exported item along the entire analyzed period (93.9 % of all road vehicles exported in 2004). The value of these exports registered a general upward trend, increasing from 9.7 million dollars in 2000 to 118.0 million dollars in 2004.

     In respect of commercial vehicles Dacia Pick-Up is the most exported item.    

    The exports of trucks were insignificant; in 2004 they represented only 7.6 million dollars, representing 6.0 % of the sector exports.

     As for imports, the cars represented the most imported item, with a 70.8 %  share of all road vehicles imported in 2004. The value of the cars imported over the 2000 – 2004 period increased 10.7 times, i.e. from 112.7 million dollars in 2000 to 1,205.6 million dollars in 2004.

     In 2004 the truck imports ranked second with a share of 24.8 % while the imports of buses took the third place with a share of 4.4 %.

     Between 2000 – 2004 the main destinations of the car exports were China with a 30 – 42 % share, followed by Siria with a 12.1 – 40.1 share and Turkey with a 8.6 – 29.9 % share

     During the same period the main suppliers of road transport vehicles to the Romanian market were:

-          for buses: Germany (13.1 – 43.2 %), Turkey (8.7 – 42.9 %), Italy  ( 4.3 – 18.2 %);

-          for cars: Germany (32.7 – 46.2 %), Turkey (8.8 – 16.5 %), France (6.9 – 15.8 %);

-          for trucks: Germany (28.4 – 52.9 %), Italy (21.4 – 42.7 %), France (7.5 – 11.0 %).

 

B. The industry of railway means of transport

 

     After 1990 the Romanian industry of railway means of transport followed generally the same descending trend as the industry as a whole.

     Between 1998 – 2003 the output of locomotives scored a very low level, the internal needs being covered by imports. The output of passenger cars shared the same fate (see table below). The only engine of the development of the sector was represented by the wagons manufacturing which registered a spectacular increase, mainly influenced by the foreign market demands.

                            The rolling stock output between 1998 – 2003

Pieces

         Items

2000

2001

2002

2003

2004*

Locomotives

2

1

5

8

Waggons

1,120

1,286

1,429

2,127

2,368

Passenger cars

-

4

23

4

              Source: N.I.S. Statistical yearbook of Romania, 2004

                        * N.I.S. Statistical bulletin  for industry nr. 12/2004

 

     The prominent manufacturers of railway means of transport in 2003 were Astra Vagoane Arad SA (turnover 3,488 billion lei), Faur SA (turnover 484 billion lei) and Astra Vagoane Calatori SA (turnover 348.7 billion lei).

 

Foreign trade

 

     Over the 2000 – 2004 period the rolling stock foreign trade balance was always in excess excepting 2003 when it turned in deficit due to imports of motorailers.

     The foreign trade balance was decisively influenced by the exports of wagons with a 68.7 % share of the total exports of the sector in 2004 and exports of rolling stock components with a 23.7 % share, on one hand, and the imports of rolling stock components with a 48.4 % share and imports of motorailers with a 36.9 % share, on the other.

 

                        Rolling stock foreign trade balance between 1999 - 2003

                                                                                                                    Million USD

Items

 

2000

2001

2002

2003

2004

Electric locomotives

(86.01)

 Export

23.8

-

1.4

2.1

8.3

 Import

22.7

0.1

-

4.2

2.0

 Balance

1.1

- 0.1

1.4

- 2.1

6.3

Diesel locomotives

(86.02)

 Export

2.0

3.6

3.8

4.3

5.8

 Import

2.2

0.2

-

-

2.5

 Balance

- 0.2

3.4

3.8

4.3

3.3

Motorailers

(86.03)

 Export

-

-

-

1.3

0.2

 Import

-

-

4.4

109.3

66.5

 Balance

-

-

- 4.4

- 108.0