Profits generated by the top 15 car part producers in Romania fell more than 70% in 2007, year-on-year, after a second wave of investments was started by global giants such as Continental and Michelin in their Romanian plants.
According to a ZF survey, the top 15 companies that operate in the car part industry derived a cumulated net income worth 11m euros last year, down from 39m euros, the level reported in 2006.
"Investments are recouped over a longer period of time and there are also many who are reinvesting," stated Monica Barbuletiu, vice-president of the Romanian Agency for Foreign Investments (ARIS).
Car producers, which, in some cases, have been present on the local market for over 10 years, are currently investing to boost initial production capacities or introduce new equipment and production systems.
Two of the major investors in the domestic car part industry are Continental and Michelin, which hold the top two positions in the car part producers' ranking depending on turnover.
Continental's development and retooling budget this year amounts to 40m euros, while so far overall investments in the five plants have topped 300m euros. Following a similar pattern, Michelin has injected around 250m euros into its three Romanian plants with annual investments worth 40m euros.
"They have seen major developments in the past two years and many plan to boost their businesses in the following years, as well. However, we don't hold data about all the companies (...)," explained Barbuletiu.
While in the case of domestic profits most players in the sector are weak, in the case of sales all of them posted growth. Thus, according to the data reported to the Finance Ministry, the cumulated turnover of the top 15 companies in 2007 went beyond 2.7bn euros, up 37% on 2006.
Also, the number of employees at the 15 comp
