BUCHAREST - Dacia will begin installing an imported Hyundai Accent engine in one of its models later this year.
The engine supply deal will be the first result of a joint-venture agreement signed last October by Dacia and Hyundai.
Romanian officials said Hyundai was chosen over other potential partners because it had the best plan to assure the survival of Dacia's own products.
Constantin Stroe, president of Dacia, would not say which car would get the engine, or which engine Hyundai would supply.
In 1999 or 2000, Dacia is expected to introduce an all-new car, its first since 1995. The car, code-named D33, was conceived by Dacia engineers and designed with the help of IDeA in Turin. It will also use Hyundai engines.
'This will be an absolutely modern car which will compete with similar foreign vehicles, while its price will remain reasonably low,' said Stroe. No other details were provided.
The joint-venture agreement signed last fall is for the production of 50,000 Hyundai Accents and 100,000 engines starting in 1999. Parts of both cars and engines will be gradually sourced from Romania with Hyundai's assistance.
The Accents manufactured in Dacia's plant, about 120km north of Bucharest, will be sold both on the Romanian market and abroad.
'No news referring to the marketing strategy of the Hyundai cars to be produced in Romania can be unveiled for the moment,' said Radu Cristian from the marketing department of Hyundai's Romanian distributor. The distributor has been operating since 1995.
At the announced base price of about $8,000, the Hyundai Accent made in Romania will compete with the Daewoo Nexia (sold under the name 'Cielo' in Romania). The Cielo costs $8,750.
Daewoo set up a joint venture in Romania in 1995 with a state-owned company that formerly manufactured Citroen cars. In the past three years Daewoo has became a major presence in the domestic market, second only to Dacia.
'We hope the agreement with Hyundai will be beneficial' to getting new technology into Dacia cars, said Stroe.
Although their design is old, Dacia sold out its production in 1997, over 100,000 units, which was a record. Customers wait about three months for new cars. They have no alternative in the same price range.
The Dacia 1310, based on the old Renault 12, is the most popular car in Romania. Over 75,000 units were sold in 1997. The price is low (starting at $3,500) and service and parts are easily obtained.
For about three years, Dacia has also been manufacturing a new model called the Dacia Nova, designed exclusively in Romania. The 4000mm, 1.6-liter engine, compact sedan is gradually becoming more popular due to its improved look and performance. It costs about $500 more than the 1310.