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Ford negotiates for Romanian plant, Toyota does deal with EDF

Ford is to push into Eastern Europe by buying a majority share in a car plant at Craiova, Romania. It is expected to become one of its biggest EU plants.

The American carmaker is in final stages of negotiation with the Romanian government. The factory was previously operated by Daewoo of Korea. Romanian prime minister Calin Tariceanu has taken a personal interest in the sale and wants the deal completed by this weekend. John Fleming, president of Ford of Europe, said last week that its due diligence had been completed, a price agreed upon, and that only a few items remained for discussion. An announcement is expected within a fortnight.

The Bucharest government took over Daewoo Automobile Craiova after the collapse of Daewoo Motor in 1999 and entrusted the sale of 72.4% of the company to Avas, the state privatization committee. The process has taken more than two years. At the outset, Ford was expected to compete against General Motors. But earlier this year GM pulled out, as did Renault and other companies that had expressed interest. Ford’s was the only bid received by the government.

The factory, which started life making versions of Citroën cars and was taken over by Daewoo in 1994, has a capacity of 300,000 cars a year and the attraction for Ford is that it can make engines and transmissions as well as cars and has a fully trained workforce.

The size of the bid has not been declared but Ford is expected to invest $921 million (€675 million) in the factory. Fleming said it would take 12 to 15 months from completion of the sales agreement to adapt the plant to produce a series of Ford models. He declined to say which models would be made there but the new Fiesta, to be previewed at the forthcoming Frankfurt Motor Show in the shape of the Verve concept car, is the most likely candidate.

Carmakers are flocking to Central and Eastern Europe to take advantage of labor rates that are a fraction of those in Germany or the UK. Renault took control of Dacia, Romania’s other motor manufacturer, in 1999. Dacia makes the Logan, the “€5,000 car,” a simple, low-cost family salon that will go on sale in Britain next year.

Toyota is to announce its latest move to win over eco-conscious motorists this week when it joins forces with Electricité de France (EDF) to bring plug-in hybrid cars to Europe for the first time. EDF and Toyota are expected to say they will offer special plug-in points for the new type of hybrid. The vehicle is a development of Toyota’s existing hybrid technology, which combines batteries and conventional engines to reduce fuel consumption.

Plug-ins have more powerful batteries than the current cars, and can travel further without using petrol. Users can recharge the battery at home from the main supply. Such cars have already received approval for test driving in Japan. The tie-up with EDF is expected to be confirmed at a conference in Paris this week, although details were still under wraps this weekend. Other manufacturers are making their own versions of plug-ins. General Motors’ E-Flex technology is an electric vehicle designed to be plugged into the mains overnight but also with a small combustion engine to keep the batteries charged on journeys of more than 40 miles (64 km). Several manufacturers are expected to unveil new hybrid cars at Frankfurt. (