Martin Kleinbrod, general manager of Continental Romania, one of the leading German investors in the auto parts industry, believes that economic development in Romania is transforming the domestic market from a production location into a potential source for sustaining profit margins, as well as a direct market for domestically manufactured products.

"As a result of Romania's economic growth, which has involved a rapid rise in costs, in particular wage costs, along with a labour shortage, Romania is currently viewed rather as an attractive market instead of merely a location for production facilities," said Martin Kleinbrod, general manager of Continental Romania.

For instance, Continental sells around 8% of its tyre production, which is manufactured in Timisoara, on the Romanian market.

The majority of international players in the industry, which are present in Romania, are continuing to develop their production facilities based in Timisoara, Arad, Sibiu and Brasov, the main cities which managed to attract start-up investments on this segment in the mid 1990s.

"There are still areas in Romania that have a high potential for investments, but for those investments to succeed, there needs to be a tighter collaboration between the authorities and investors in choosing the appropriate locations in order to achieve a balanced development in these areas," added Kleinbrod.

At the end of last year, the German group Continental, which holds five production facilities in Romania, involved in different segments of the auto industry, had invested approximately 250 million euros, the bulk of which, around 170 million euros, were in the tyre plant in Timisoara.

Continental officials have announced additional investments of 40 million euros to develop production facilities this year. Fifteen million euros of these funds have been allocated for th