Ford B-Max Going Into Production in Romania

BUCHAREST, Romania — Ford Romania has announced that it will launch production of the new B-Max, an environmentally friendly small car, at its plant in the Romanian city of Craiova. The B-Max is a small crossover based on the Ford Fiesta and previewed at the 2009 Geneva Auto Show in the form of the Iosis Max concept.

According to Ford Europe's vice president for legal affairs, Wolfgang Schneider, the company will use a $562 million loan provided by the European Investment Bank (EIB) to set up production. An agreement for a government guarantee of the loan was signed last week, which will be valid for five years, and the risk commission has been set at 2 percent a year.

"We hope that, by guaranteeing the loan, we can further help Ford's plant in Craiova and the company's investment in Romania," Prime Minister Emil Boc said at the signing ceremony.

Analysts believe the EIB loan will enable Ford to manufacture 250,000 units a year within 18 months.

Ford became the main shareholder in the Craiova-based plant in 2007 after buying a 72.4 percent stake from the Romanian state. Ford later increased its stake to over 90 percent.

The U.S. carmaker launched the Transit Connect, assembled in Craiova, last September.

Ford said at the time the second model to be produced in Craiova would be a small car. The company also announced plans to build a small-displacement, advanced EcoBoost gasoline engine. However, no production dates were mentioned.

Ford plans to produce between 20,000 and 30,000 vehicles at the plant in Craiova in 2010.

Inside Line says: More well-planned expansion from Ford. — Evgeniy Vorotnikov, Correspondent