Automotive slump in Romania: tens of thousands of jobs at stake
The downturn in the Romanian automotive industry could pose serious challenges for the labour market, with tens of thousands of jobs at risk, according to a recent analysis by the Oeconomus Economic Research Foundation. The weakness in the sector could also have an impact on the economy as a whole.
Romania's economy has shown spectacular growth over the past decade, largely driven by the automotive sector. Not only does this sector account for 13-14% of GDP, it is also where the majority of foreign direct investment (FDI) inflows are concentrated, making it one of the engines of the economy. Led by Ford and Renault-Dacia, Romania has developed into a major car and parts manufacturing hub, creating tens of thousands of jobs directly and indirectly.
Romania is one of the main sources of foreign investment in the automotive sector.
However, the geopolitical and economic shocks of recent years (COVID, Russian-Ukrainian war) and the restructuring of the European automotive industry, such as the shift to electromobility, have interrupted this momentum. At the beginning of 2025, the volume of car production already showed a double-digit decline, especially at Dacia and Ford's Otosan plants. The decline could cause serious tensions not only in production and exports, but also in the labour market. One of the most vulnerable points of the Romanian economy at the moment is precisely the overweight of the automotive sector, which is further worsening the country's growth prospects through the deterioration of the external trade balance, according to an analysis by Oeconomus Economic Research Foundation.
The downturn in Romania's automotive sector is also having an impact on foreign trade and the labour market
.The downturn in the automotive sector is affecting not only car manufacturing, but also the components and supply sector, as well as related IT and technical services. Romania's automotive industry employs around 400,000 people, of which 248,000 work in motor vehicle production and 160,000 in trade and repair - a much higher proportion than in most Central and Eastern European countries.
In 2024, a number of companies have announced redundancies: Forvia, Continental, SEBN, Dacia, Holmbergs and Bosch have all made or are preparing to make thousands of workers redundant. Based on the automotive layoffs announced at European level, Romania is also facing a serious employment crisis, which could also deter future investment, as 60% of FDI into the country has so far been linked to the automotive sector.
The regional implications cannot be ignored. Thousands of jobs could be lost in Poland, the Czech Republic and Slovakia as a result of restructuring. But Hungary is an exception: according to Eurofound data, new jobs have been announced in the automotive sector (1,310 new jobs in total), mainly as a result of investments in 2023, rather than job cuts. Although the Hungarian automotive sector has also had a negative year, no major rationalisation announcements have been made so far, with redundancies mainly in the supplier sector - but at a lower rate than in neighbouring countries.
The crisis in the Romanian automotive industry is causing serious economic challenges in terms of foreign trade and employment and could be a warning sign for other countries in the region, including Hungary - although the latter has so far avoided the more serious consequences, mainly thanks to recent investment.
No need to panic, but it is worth considering what would happen if someone lost their job
- HR Portal asked industry players to find out whether the trouble could also catch up with the Hungarian subsidiaries of German car makers.