American carmaker Ford will invest up to EUR 200 million to start producing a new model in its Romanian factory in Craiova.

Ford will start producing the EcoSport small SUV model in Romania starting fall 2017. The EcoSport SUVs made in Craiova will be sold on all of Ford’s European markets, except Russia, the group announced on Tuesday, March 22.

The Ford EcoSport cars sold in Europe are currently produced in Chennai, India. The model’s sales in Europe have increased by 30% this year and Ford estimates that the small SUV sales in Europe will grow by 35% by 2017, reaching 1.5 million cars per year.

“Considering that the small SUV sales will increase, for us it’s a good moment to move the EcoSport production to Europe and thus benefit from the excellent workforce at our factory in Craiova,” said Jim Farley, President and CEO of Ford Europe.

Thus, Ford’s decision to start producing the EcoSport model in Craiova, may also turn Ford Romania into one of the country’s biggest companies in terms of revenues and exports, and further boost Romania’s automotive sector. Romanian carmaker Dacia, owed by French group Renault, has become the country’s biggest company in the last two years, due to the strong sales of its Duster SUV model in Europe.

Ford took over the car factory in Craiova in 2008 and has invested over EUR 1 billion to support its operations here, in the past seven years, according to the group’s representatives. The factory currently produces the B-Max model and the 1-liter EcoBoost engine. In 2015, Ford produced some 48,000 B-Max cars at Craiova, 9% fewer than in 2014.

Then they bought the factory from the Romanian state, the Americans had promised to reach a production of 250,000 cars at Craiova by September 2011. That target hasn’t been reached yet, as the B-Max model’s slaes slowly declined and the production of a second model was delayed. Thus, the factory only has 2.650 employees at the moment, compared to the 7,000 Ford had planned to reach before the crisis.

Ford’s decision to invest EUR 200 million and bring a new model at the Craiova factory came after the carmaker had talks with the Romanian Government for “a positive operating framework” that would help Ford maintain the competitiveness of its factory in Craiova, according to the company’s representatives. The American group has been asking the state for better infrastructure, namely a highway from Craiova to Pitesti and a better railway connection.

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Andrei Chirileasa, andrei@romania-insider.com