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Romanian new car sales fell 4.3% in January after EU entry

Romanian new car sales fell 4.3% in January, the first decline after two years of rapid growth, as citizens held off purchases just after the country joined the European Union.

Sales dropped to 14,326 units in January from 14,973 a year earlier, the Association of Automobile Producers & Importers  said in an e-mailed statement today. Romanians delayed purchases of new cars, expecting the country's entry to the EU on January 1 would lead to cheaper imports of used vehicles. New car sales rose 14% in 2006 and 49% in 2005 as Romania's imminent entry to the EU helped raise wages and strengthen the local currency. Romania must drop some restrictions on imports of used cars as a condition of its EU entry, making the vehicles cheaper. The government is considering new taxes and other programs to stimulate the purchase of new cars and discourage citizens from buying used imports from other EU nations. Sales of domestically produced cars, mainly from Dacia SA, a unit of French carmaker Renault SA, fell 25% in January from a year earlier to 5,429 units.

Imports rose 15% to 8,897, the association said. Romanian car exports, mostly from Dacia, rose 82% in January to 10,128 even as local production dropped 0.6% to 15,014, the association said. Romanian Environment Minister Sulfina Barbu said last week that even after two years of soaring new-car sales, the average car in Romania is more than 13 years old. She also announced the government would extend a program from last year to encourage owners of cars more than 12 years old to buy new ones. Barbu said the government will give 3,000 lei ($1,160) to 16,500 owners of old cars this year to help them buy vehicles that meet stricter emissions standards and to junk their old ones. (Bloomberg)