October 12 (SeeNews) - U.S. car maker Ford Motor Company said on Thursday it has started production of the new EcoSport SUV model at its factory in Craiova, in southern Romania.
As announced in March 2016, the investment in the EcoSport assembly line adds up to 200 million euro ($236 million). The plant will employ some 1,700, Ford said in a press release.
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"Foreign investment strengthens Romanian capital, as we have seen here. In Craiova, we have a very good example of an industrial ecosystem consisting of dozens of Romanian companies developed around Ford," Romania's president Klaus Iohannis said during a speech at the launch event in Craiova.
Ford ended production of its B-Max model in Craiova last month to support EcoSport manufacturing at the same factory. The decision was taken due to market developments and dynamics in the B-segment, as more and more customers have started preferring SUVs and Crossovers to multi-purpose vehicles (MPVs), which include B-Max, Ford has said.
The EcoSport SUVs produced in Craiova will be sold in Europe, except Russia.
Presently, EcoSport is produced in Ford's Indian plant in Chennai. The Chennai plant will continue to make the EcoSport for domestic sales and for other markets.
In September, Romania's government pledged to Ford that it will complete the construction of Pitesti-Sibiu highway by the end of 2020. Romania's prime minister Mihai Tudose said that the road link between Pitesti and Craiova is also a priority for the government.
The road links, which will offer easier access to Western markets, have been requested for several years now by Romanian car maker Dacia, a unit of France's Renault.
In August 2016, the finance ministry and Ford convened to extend to 2025 from 2017 the deadline by which the car maker's local plant should meet the output volume target set in the privatisation contract. In exchange for extending the deadline, the government asked Ford to invest a further 130 million euro in Romania by 2019.
During 2008-2012, the carmaker received 75 million euro in state aid, which it has complemented with over 1 billion euro in investments to date.
Ford entered Romania in March 2008 when it wrapped up the acquisition of a 72.4% stake in Automobile Craiova, the sole owner of car maker and distributor Daewoo Automobile Romania. In 2012, the factory in Craiova launched production of the B-Max model, which it sells only on the European market. Ford also produces EcoBoost 1.0 litre- and 1.5 litre-engines in Craiova.
($=0.8468 euro)
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