Romania should focus on banning all polluting engines

Romania became an important point of interest for car manufacturers and their suppliers in recent years. The entire country is covered by the factories of automotive suppliers or car manufacturers. Ciprian Gavriliu, Tax Partner, Deloitte Romania, explained Automotive Today what are the main competitive advantages of the Romanian automotive industry.

“Many automotive producers came to Romania due to close location to their main customers (such as Renault or Ford), or to reduced costs of utilities and land, reduced cost of labour or highly skilled personnel. The main disadvantage is the lack of highways in Romania and poor railroads,” said Ciprian Gavriliu.

In his opinion, the development of the automotive industry depends a lot on the development of the country.

 “If we want to help the Romanian industry, including automotive, we need to make significant investments in highways, railroads and, why not, to improve the transport on the Danube river. Secondly, Romania needs to invest more in education and to find ways to keep the young people in the country. In order to have consistent growth in the future and to cover the deficit of personnel from automotive industry, new solutions should be found in order to develop the skills of the younger generation”, he told Automotive Today.

In the near future, Romanian industry could benefit from the Brexit, although the impact is difficult to predict.

“Please take into consideration that all Romanian car manufacturers and automotive part producers/suppliers have their core business with continental Europe, not with UK. Many companies might decide to close their production units from UK and increase the ones in Central East Europe or North Africa, such as Romania or Morocco”, added Ciprian Gavriliu.

But, in his opinion, not having a predictability of the legislation in Romania, especially the laws directly affecting the cost of production, is one of the factors which impact the automotive industry.

”As far as car sales are concerned, during the past two years we have noticed a slight increase of sales of new cars. However, it can’t be compared to the market of second-hand cars brought from Western Europe”, explained Ciprian Gavriliu.

He also tackled the issue of polluting cars in the cities. In his opinion, Romania should focus on banning all polluting engines, and that polluting norms should be taken into consideration when banning a specific engine. “Also, we need to see how environmentally friendly the electric and hybrid cars are and to have in place an infrastructure for them and a mechanism of recycling the batteries of these cars”, he added.

According to Ciprian Gavriliu, the authorities should limit the import of second-hand cars and should impose more regulations on this sector related to harsher technical inspections and to polluting norms: “Also, part of this sector regarding the sale of second hand cars may not be taxed, so there are a lot of individuals who sell more than two or three cars per year, which might be considered an economic activity and which needs to be taxed accordingly”, concluded Ciprian Gavriliu.

On the other hand, new digital technologies are shaping a new generation of customers. “The connectivity of all devices (e.g., mobile phone, tablets and laptop) with the car and the artificial intelligence embedded in a car are two of the main requirements of the new generation,” said Gavriliu. “We need these two in order to avoid traffic jams, to be informed about the route, to have phone calls, to connect our tablets, to park our car, to analyse data about the trip and to see when we should do maintenance repairs for the car. In order to do that, the car should have a lot of incorporated technology. The car is no longer considered a symbol of a generation or the thing that gives you freedom (i.e. freedom of movement). Nowadays, the car is considered a means of transportation or as something that gives you the possibility to share the ride with others”.

Last but not least, Ciprian Gavriliu underlined that the role of mobility services will definitely increase significantly in the future and it will impact the way car manufacturers will produce cars.