Romania’s economy has shown gradual growth in recent years, but this has been made unstable by various imbalances. The automotive industry, one of the country’s most successful manufacturing sectors, has been responsible for the lion’s share of this growth, but now it seems that the economic upturn may be coming to an end. The crisis resulting from the restructuring of the automotive industry affecting the entire Central and Eastern European region has not left our southeastern neighbour unscathed either. Plant closures, layoffs and the reduction in the number of development centres have created a negative atmosphere in the Romanian automotive industry and the economy. In our brief summary, we take a look at the current situation of the Romanian economy and the crisis affecting the automotive industry, including its impact on the region.
The expansion of the Romanian economy has been the focus of attention in the economic press on numerous occasions in recent years. The relatively rapid and spectacular growth stands out even among EU member states, but the sustainability of this expansion is questionable due to a number of internal imbalances.
Between 2015 and 2025 – with the last two years also including forecast data for the given periods – Romanian real GDP grew by an average of 3.1% per annum. However, due to the coronavirus pandemic in 2020 and the Russian-Ukrainian war in 2022, the country was unable to maintain its previous economic performance. Real GDP growth was 2.4% in 2023 and 0.9% in 2024, which fell short of the usually more optimistic forecasts made until then. According to cautious estimates in the forecasts for 2025, the Romanian economy could achieve 1.6% growth this year. This year, a stronger-than-expected slowdown in consumption and a lack of growth in investment could cause a downturn in Romania, alongside the collapse of the automotive sector. The transformation taking place in the automotive segment is making it significantly more difficult to return to dynamic growth, while revenue shortfalls due to the deterioration in the foreign trade balance and the decline in exports are also dampening the outlook for this year.
The automotive industry, and car and parts manufacturing specifically, has become a key sector in the Romanian economy. It accounts for 13-14% of Romanian GDP on average, so its declining performance can have a significant impact on the country’s entire economy. Almost 60% of FDI flowing into Romania is concentrated in the automotive segment, which shows the importance of this sector within the economy.
Romania has a small but growing automotive cluster with a network of suppliers and component manufacturers. Most Romanian suppliers operate in joint ventures with foreign partners, with the Romanian side providing manufacturing facilities, utilities and engineering services, while international car manufacturers bring in their brands, global know-how and services. These joint ventures produce both for the domestic market (e.g. for Renault-Dacia) and for overseas markets. The two largest manufacturers and suppliers in the country are Ford and Dacia, which is part of the Renault Group. Twelve years ago, the French Renault Group invested €1.5 billion in Dacia, which has an annual capacity of 350,000 cars. The company employs more than 13,000 people. Approximately 91% of the cars manufactured by Dacia are exported to 60 markets on four continents. In addition, components manufactured by Dacia provide the necessary parts for plants in Morocco, Russia, Iran, India, Brazil, Colombia and South Africa. In October 2007, Ford Motor Company acquired the SC Daewoo Automobile Romania plant in Craiova, Romania, which it has gradually expanded over the past decade and a half. Ford’s Craiova plant assembles the EcoSport and Puma models, the brand’s first hybrid cars to be assembled in Romania. It also manufactures modern engines (ECO boost), which are shipped from here to other manufacturing countries.
Romania has attracted not only car manufacturers, but also first and second-tier suppliers such as Bosch, Continental, Daimler, Federal Mogul Autoparts and Marquardt. Despite strong competition, there is demand for suppliers involved in the manufacture of electrical and electronic systems, tyres, car seats, steering wheels and plastic components, which also creates wide-ranging opportunities for first- to third-tier British suppliers.
The two Romanian car manufacturers, Automobile Dacia and Ford Otosan, produced a record number of cars in 2023: 513,050 units (including light commercial vehicles), which is 0.7% more than in 2022 and a significant 17% increase compared to 2021. Of the total volume in 2023, the Dacia factory produced 322,086 vehicles, representing a 2.5% increase, while Ford Otosan Craiova produced 190,964 vehicles, representing a 2% decrease compared to 2022.
The data available so far for 2025 confirm the downward trend. According to spring data from the Romanian Automobile Manufacturers Association (ACAROM), the Dacia plant in Mioveni produced 26,417 vehicles in February 2025, while the Ford Otosan plant in Craiova produced 19,380 vehicles. Overall, car production reached 85,260 units in the first two months of 2025, representing a 14% decrease compared to the same period in 2024.
There are two areas in particular where the downturn resulting from the current restructuring could significantly worsen the indicators: one is foreign trade, specifically exports, and the other is labour and employment.
In 2024, the value of total Romanian goods exports was USD 92,700 million. Last year’s figure was 12% lower than the 2023 figure, which was already a sign of the downturn beginning in the automotive sector. The Romanian statistical office has not yet published the 2024 export data by commodity group, so we can mainly rely on data from before 2023. Within total goods exports, the main group of vehicles and transport equipment represents a steadily growing value in Romanian exports. In 2023, the export value of this main group accounted for 18% of total goods exports (USD 19,400 million). Breaking this down further, the largest sub-group within the segment is passenger car manufacturing, which accounted for 8.9% of total goods exports in 2023. All this shows that Romania has developed a specific dependence on the automotive industry, which can make it particularly vulnerable in times of crisis such as the current one. We must also take into account that, in addition to the main product group (vehicles and transport equipment) and its sub-sector (passenger car manufacturing), many other groups are also affected by the vehicle crisis. Companies that are present on the market as suppliers, as well as those that are linked to the automotive industry through components, technical equipment and IT technology support are also exposed to the current situation. As a result, similar trends are occurring in several sub-sectors of the manufacturing industry in addition to the automotive industry, which will have an impact on the Romanian economy and labour market in addition to foreign trade.
As mentioned above, in addition to foreign trade, the labour market has been significantly affected during the current crisis in the Romanian automotive industry. In 2024, there were announcements about large-scale restructuring in the automotive industry in most EU member states: they projected the loss of 53,669 jobs in the EU, or 88,669 jobs if we include Volkswagen’s announcement on 20 December 2024. Most companies cited rising costs, competitive pressure, the need to convert sites to electric vehicle production, and declining domestic and international demand as reasons for the redundancies. Of the 104 restructurings announced in the automotive industry in 2024, 10 involved offshoring (the transfer of company activities to another country), mainly to eastern member states and neighbouring Western Balkan countries. This represented 5,358 jobs that “left” their country, 3,610 of which were relocated outside the EU. According to 2024 data, the number of people employed in the automotive industry in Romania is estimated to be slightly over 400,000, which includes not only vehicle manufacturing but also wholesale and retail trade, as well as repair services.
Compared to other countries in the region, Romanian employment figures in the automotive segment are partly exceptional. In 2023, 2.7% of the total Romanian employment (approximately 160,000 people) was in the wholesale and retail trade as well as the repair services sector, and 3.1% (approximately 248,000 people) was in motor vehicle manufacturing. In Central and Eastern European countries, with the exception of Romania, an average of 1.85% of total employment was in the trade and repair services sector in 2023.
Due to the restructuring, many automotive companies began downsizing in Romania, starting already at the end of 2024. Forvia, a manufacturer of automotive components, has laid off 74 employees so far and closed its technical centre in Nagyvárad in December 2024. German company Continental had previously established five production units in Romania, as well as four engineering centres in Temesvár, Nagyszeben, Károly és Jászvásár, from which it has so far cut 870 jobs. Japanese company SEBN (Sumitomo Electric Bordnetze) laid off 676 employees from its unit in Drobeta-Turnu Severin. At Dacia’s Mioveni plant, employees are being encouraged to leave the company voluntarily in exchange for certain sums of money. Employees with more than 16 years of service can receive up to RON 200,000 (HUF 15.7 million), while those who have been there for less than two years can receive RON 24,000 (HUF 1.9 million). Swedish company Holmbergs Safety Systems, which manufactured child safety belts and seats, has laid off 353 employees. Bosch’s Romanian subsidiary has also begun layoffs: the company, which also supplies the automotive industry, reduced its Romanian workforce by 200 in one year by the end of the 2024 financial year.
The automotive industry plays a significant role in the economy of all countries in the Central and Eastern European region, including Hungary. Based on the Romanian data, it is reasonable to ask how other countries in the region are affected by the restructuring and crisis in the European automotive industry.
According to Eurofound data for 2024, Poland is expected to lose the most jobs in the automotive sector in Central and Eastern Europe as a result of restructuring. Here, 17 announcements have been recorded that affect employment and the entire operation of the company. Based on this, 3,638 jobs will be lost in Poland as a result of various rationalisation processes, and 790 new jobs will be created in the automotive sector. In the Czech Republic, 5 company announcements could result in 2,630 job losses, with no new jobs being created. In Slovakia, only two companies have indicated similar intentions, with 207 jobs being lost and 70 new ones being created. According to the survey, Hungary is the only country in the region where three announcements would affect employment, but this would not result in job losses, but rather in new hires, creating a total of 1,310 new jobs. A similar trend has only been seen in Spain among the EU member states. The Hungarian data is based on new investments in the automotive sector announced last year. There is no doubt that Hungarian automotive production has achieved similarly unfavourable results this year as in neighbouring countries, but companies here have not yet announced any rationalisation measures affecting employment. In Hungary, job cuts are more noticeable among supplier companies, but the number of employees laid off is not yet close to the figures shown in the table.
Overall, the restructuring of the automotive industry and the resulting employment crisis are breaking the previous upward trend for the Romanian economy. Due to the decline in exports, the growing deficits in foreign trade are further increasing the imbalance in the Romanian economy. The crisis may also affect further capital inflows, as 60% of FDI flowing into the country was related to the automotive industry. A similar negative trend can be observed in the wider region, with the situation in Poland in particular expected to deteriorate due to large-scale job losses.
