BUCHAREST, Romania — Italian tire company Pirelli said Thursday it is investing €235 million (US$324 million) to boost its production capacity in Romania and to build a new factory producing diesel engine filters.
The total investment includes money already spent on the construction of two factories in Slatina that make high performance tires and steel cord.
Pirelli spent €170 million (US$234 million) on a new factory in Slatina in 2006 that produced more than 2 million tires in its first year of operation and is on track to produce 4 million in 2008.
The Italian company spent €40 million (US$55 million) on another factory that makes steel cord, used in radial tires. It will also spend €25 million (US$34.4 million) on a new factory in Romania making filters to cut down emissions from diesel engines.
Also Thursday, U.S. auto parts maker Delphi announced it was investing about €100 million (US$138 million) by 2012 in a new factory in Romania to produce injectors and other components for diesel engines, Romanian state news agency Rompres reported. The Troy, Michigan-based company said it needed the new facility to cope with rising demand.
The new factory, which will be located in the northeast city of Iasi, will employ over 1,000 workers.
The investments are seen as a boost to Romania's auto industry. Ford is negotiating with the Romanian government to buy a former Daewoo plant, which the U.S. company wants to modernize to build up to 300,000 cars, including a new model, and 300,000 engines per year.