Report "Romanian Automotive Market: Passenger Cars, Components and Spare Parts 2007/2008 -2010":

With a population of 21,6 million Romania is the third largest market in terms of population in Central and Eastern Europe (CEE) and the 7^th largest among the European Union member states. Although Romania’s real GDP is growing at above 5%, Romania is one of the less wealthy nations within the E.U.. Romania’s GDP per capita currently is about 5.000 EUR.

Romania’s car penetration is still much lower than in Western European markets and also most other CEE markets like Poland or Bulgaria. In terms of car parc however, Romania is among the top CEE markets. As in most other CEE markets, the car parc is relatively old. 50% of cars are older than 10 years.

Since Romania became a member of the EU in 2007, the import of used cars has increased significantly. These imports mainly consist of cars which comply with the Euro 3 - emission standards. Romania is actively trying to prevent a further increase in older used car imports. However, a new registration tax scheme, with the aim of making older, less environmentally friendly cars much more expensive to import, was challenged by the European Court of Justice. Given this situation, the imports of older used cars into Romania will further increase.

The new car market is not affected through the increase in used car imports. It was also increasing strongly by 25% in the past and will grow at about 11% p.a. for the years towards 2010. A government initiative to pay people for scrapping their older cars and buying a new one is helping to boost the market.

Financing of cars is well established, with loan financing and leasing being equally preferred by private individuals and leasing being the preferred method by corporate buyers. Financing used car purchases is also widespread.

Romania has an active automotive industry since more than half a century. With Dacia, there exists a local passenger car brand. Dacia was taken over 100% by Renault in 1999. Since then, production capacity was increased and Dacia has been successfully positioned as a low-cost brand within parts of Europe. In 2007, Dacia manufactured 223.000 cars. Renault is planning to increase production levels to over 400.000 by 2010. Until end of 2007, the Korean Car Manufacturer Daewoo Motors has manufacturing a variety of its models in Romania. In March 2008 Ford bought the former Daewoo plant and plans to use Romania as a production base for a low-cost car still to be designed by 2010. In addition, Daimler is planning to establish a manufacturing venture in Romania, also in the mini- and small car segment. Given these developments, the Romanian car industry will witness a major boost over the next year.

The current situation provides excellent opportunities for suppliers of all tiers. Ford is partly looking for a new supplier network and Daimler will also be looking for low-cost but good quality suppliers to support their strategy. Currently, the Romanian automotive industry consists of a limited number of players – far less than in Poland, for example.

The aftermarket is growing by over 10,7% over the next years to 2010, slightly above the car parc. The aftermarket is one of the most attractive sectors of the Romanian automotive industry over the next years. With further additions to the parc and with more demanding consumers, better and more frequent service and better parts are needed.

The Romanian distribution system for spare parts is currently expanding. Larger international players like ATR, AD and Temot are already present in the market. In addition there is still a large number of smaller players. Currently, consolidation is no issue – the market is large enough for all players to grow. Eventually, consolidation will start.

For foreign aftermarket parts manufacturers the market is highly attractive. The main challenge, however, is the countrywide access to service stations (the main sales channel for parts to car owners), to spare part shops and eventually to the end customers.

To prepare this market report, we used primary and secondary research methods: expert interviews and consumer surveys – in particular for the market of automotive parts, which is not covered yet by any substantial statistical data – and standard analysis of secondary information available on the topic. Based on our experience and developed competencies we have built proprietary market models to forecast future market development. The report was compiled in the period from February to July 2008 and includes data until June 2008, if available.

For a table of content and a list of figures and tables, please see details below.

The report contains 79 pages and is priced at 890 Euro. To order, please use the attached order form or contact us at +49 (0)30 4005 49 0 or at marktforschung(a)globis-berlin.de.

Globis is a Germany-based consulting company with broad international coverage regarding strategy development, especially entry strategies into new markets.

TABLE OF CONTENTS 2

LIST OF FIGURES 4

LIST OF TABLES 5

1 SUMMARY 6

2 COUNTRY BASICS 9

2.1 Economic Development 11

2.2 Regional Economic Development 14

2.3 Romania and the European Union 16

3 ROMANIAN PASSENGER CAR MARKET 18

3.1 Romanian Car Parc 18

3.1.1 Structure of Car Parc by Age 20

3.1.2 Structure of Car Parc by Brands and Models 22

3.1.3 Car Parc in Regional Markets 23

3.2 Passenger Car Sales and Imports 25

3.2.1 Size of Market 25

3.2.2 Market Characteristics New Cars Market 29

3.2.3 Market Characteristics Used Car Imports 33

3.2.4 Sales Drivers for New Cars 35

3.2.4.1 Economic Growth and Income Levels 36

3.2.4.2 Used Car Imports 36

3.2.4.3 Regulatory environment 37

3.2.4.4 Car Financing 37

3.2.4.5 Dealership Networks / Distribution Systems 39

3.2.4.6 Consumer preferences 42

4 ROMANIAN COMPONENTS AND SPARE PARTS MARKET 44

4.1 Car Production and Components Market 44

4.1.1 Production 44

4.1.2 Components Market 48

4.2 Romanian Aftermarket 56

4.2.1 Market Segments Aftermarket (OE, IAM, Fakes) 56

4.2.2 Market Size Aftermarket 57

4.2.3 Distribution System for Spare Parts 60

4.2.3.1 Parts Importers and Distributors 62

4.2.3.2 Spare Part Shops 63

4.2.3.3 Service Stations 64

4.2.3.4 Other Supply Channels 65

5 OPPORTUNITIES AND RISKS 66

6 APPENDICES 68

6.1 Districts and Regions 68

6.2 Major Romanian Cities 70

6.3 Regulations and Fees for Car Imports 72

6.4 Sales of Foreign Brands in Romania, 2005-2007 76

7 ABBREVIATIONS 79

Figure 1: Map of Romania – Development Regions and Districts 10

Figure 2: GDP Growth Rates at Constant Prices, Change to Previous Year, 2002-2010 12

Figure 3: Development of Nominal Average Wages in Euro, 2003-2008 13

Figure 4: Inflation Rates 2001-2009 14

Figure 5: Share of Leading Regions in Total GDP, 2006 15

Figure 6: Development of Passenger Car Parc, in Mio., 1990-2010* 18

Figure 7: Car Penetration in Romania and Selected European Countries, 2006/2007 19

Figure 8: Structure of Romanian Car Parc by Age, 2007 20

Figure 9: Structure of Imported Used Cars by Age, 2007 21

Figure 10: Top-Ten Brands in Romanian Car Parc, 2007 22

Figure 11: Car Penetration in Romanian Districts, 2007 24

Figure 12: Sale of New Cars in Romania, in 1.000, 2000-2010 26

Figure 13: Import of Used Cars into Romania, in 1.000, 2000-2010 27

Figure 14: Relative Sales and Import Structure of Car Market, 2000-2010 28

Figure 15: New Car Sales by Segment, 2007 32

Figure 16: New Car Sales by Type of Engine, 2005-2007 33

Figure 17: Top Ten Brands of Imported Used Cars, 2007 34

Figure 18: Age Structure of Newly Imported Used Cars into Romania, 2006-2007 35

Figure 19: Share of Financing Arrangements for New Car Purchase, 2007 38

Figure 20: Key Criteria Influencing Car Choice in Romania, 2007 42

Figure 21: Production of Passenger Cars in Romania, in 1.000, 2000-2010 48

Figure 22: Share of OE-, IAM-, Fake-, Used-Parts for Routine Service, 2007 57

Figure 23: Size of Romanian Aftermarket, in bn. EUR, 2007-2010 59

Figure 24: Aftermarket for Important Spare Parts, in Mio. EUR, 2007-2010 60

Figure 25: Main Distribution Channels for Spare Part Distribution to Car Holders, 2007 61

Figure 26: Shares of Spare Parts Sales Channels for Non-OE, 2007 62

Table 2: Population development in development regions, 2002-2007 11

Table 3: GDP per Capita, Average Salary and Population in Romanian Regions, 2007 16

Table 4: Economic Key Figures EU / Romania, 2006 / 2007 17

Table 5: Most Popular Models by Top 5 Brands in Romanian Car Park, 2006/2007 23

Table 6: Regional Car Parks by Number of Vehicle and Car Penetration, 2007 25

Table 7: Sales and Import Structure of Car Market, in 1.000, 2000-2010 29

Table 8: Top Selling Brands (New Cars), 2006-2007 30

Table 9: Top Selling Models (New Cars), 2006-2007 31

Table 10: Largest Car Dealerships in Romania, 2007 40

Table 11: Dealerships and Service Networks of OEMs in Romania, 2008 41

Table 12: Passenger Cars Manufactured in Romania, 2006- 2007 46

Table 13: Major Romanian Component Suppliers and Service Providers 53

Table 14: Major Foreign Component Suppliers in Romania 55

Table 15: Largest Independent Importers and Distributors of Spare Parts 63

Table 16: Independent Serivce Station Chains, 2007 64

Table 17: Main Romanian Cities with over 100.000 Inhabitants 71

Table 18: Part 1 of Registration Tax Formula 72

Table 19: Part 2 of Registration Tax Formula 74

Table 20: Part 3 of Registration Tax Formula 75

Table 21: Sales of Foreign Brands, in Units, 2005-2007 78