The Romanian Government can offer Volkswagen only EUR 37.5 mln as state aid, without breaching EU regulations, but up to 35% of the whole investment in a new car plant (estimated at above EUR 1 bln) can in principle be financed with EU funds, if located in the region proposed by Romania, according to business environment minister Radu Oprea, quoted by Profit.ro.

“The decision to invest in Turkey is frozen, Volkswagen said they are not actively looking for another location - so they have a short list, which includes Romania and Bulgaria,” Oprea said.

The location proposed by Bulgaria would allow Volkswagen to cover only 25% of the investment in a new plant with EU funds, minister Oprea added.

The main obstacle seen by Volkswagen in choosing Romania for their next plant is the workforce availability - but the Government claims that even this can be fixed. Volkswagen Group has postponed the final decision to build a new car plant in Turkey, according to Automotive News Europe amid Turkish military operations in Syria.

In the future plant, Volkswagen will produce the next generation of VW Passat and the future Skoda Superb, in annual volumes of about 300,000 units. Production should start in 2022.

The company’s board is expected to decide this week if it moves ahead with the project in Turkey or not, Economica.net informed quoting Automotive News Europe -- which also speculates about the German group preferring Slovakia over both Romania and Bulgaria.

(Photo: Joachim Eckel/ Dreamstime)

editor@romania-insider.com