Dacia temporarily cuts production over weak demand

Dacia carmaker said it would idle activity for two weeks, beginning January 26 until February 8 2009, in response to weaker demand.

“As a result of the dramatic and ongoing fallout of the car markets, especially in Romanian market, Dacia will temporarily halt production for two months, starting January 26 until February 8, 2009”, Dacia informs.

Under the provisions of the collective agreement for 2008, Dacia workers who were forced to take temporary layoff will receive a redundancy pay equivalent to 85% of gross pay package.

Dacia’s sales in Romania totaled 84,708 units last year, down 17% from prior year. In December 2008, Dacia sold 3,622 cars nationwide, down 55% against 2007.

Romanian car industry records a sharp decline of sales of new cars starting October 2008. After the 30% decline registered in October 2008 compared to a year earlier, the new car sales slid 55% in November 2008 versus November 2007, and by 53% in December 2008 versus December 2007.

The collapse of Romanian car market was triggered by the financial crisis that narrowed consumers’ access to loans, by the overflow of imported cars and by the clients’ hesitance caused by a possible raise of pollution tax.

In December 2008, the number of old imported cars climbed to 54,712 units, up 471% from December 2007.

Dacia plant was forced to shrink production for a month, beginning with December 2008 until January 11, 2009 in response to the steep downslide of the Romanian car industry and in an effort to avert the stockpiling cars.

As of January 12, Dacia will reduce daily output from 1,360 cars per day to 1,085.

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