Graham Stack in Berlin
March 9, 2009
German Chancellor Angela Merkel might have recently blown off emerging Europe's bid for EU direct financial support, but one of the region's countries has benefited from her anti-crisis measures, albeit unintentionally. Romania's carmaker Dacia is seeing exports of its budget model Logan to Germany soar.
To support plummeting domestic car sales - and of course help the environment - Merkel's government introduced an "environmental bonus," paying owners of cars over nine years old €2,500 to junk their smelly old bangers and buy new environmentally-friendlier wheels.
As a direct, but unintended, result, Dacia Logan sales surged six-fold in February. The Logan now enjoys cult status in Germany as an ironic symbol of the crisis.
The reason: German policymakers forgot that owners of nine-year-old cars in crisis conditions aren't likely to fork out for a brand-new Merc, BMW or Audi, even for a €2,500 euro bonus. Rather they gun for the €7,500 Logan. The €2500 euro bonus constitutes a 33% reduction - which car dealers are now writing directly onto price labels.
So Dacia is the cheeky winner of Germany's stimulus plan, proving how difficult such things are in a globalised world.
And the sudden surge in demand from Germany couldn't come at a better time for Dacia. In the last quarter of 2008, Romanian demand for cars collapsed, leading to a production stop at the plant that employs 14,000.
Now the plant will restart production for a month to assemble 30,000 models for export to Germany.