Infinexa: Romania’s automotive industry enters a risk zone

Infinexa, a Romanian company specialising in corporate restructuring and financing for companies in distress, warns that Romania’s automotive industry has already entered a heightened-risk zone: over the past four years, companies in the sector have reduced their workforce by more than 30,000 people, even as industry turnover increased.

In addition, in the first half of 2026, local vehicle production fell by 12.7%, while the European market grew by 5.7% over the same period. Infinexa analysed 2,325 companies across the Romanian automotive value chain in its latest insights report.

“Insolvencies in the sector do not show the full extent of the deterioration in the automotive industry, and we do not expect major insolvency proceedings to emerge across the sector. This means we risk even more if we look at the wrong indicator. The decline of the industry is reflected in the relocation of plants and the loss of jobs. Foreign companies can afford to close local facilities and move operations outside Romania. That is why the insolvencies that do emerge will not accurately indicate the severity of the difficulties facing the industry,” said Adrian Lotrean, CEO of Infinexa.

The Infinexa report, based on an analysis of 2,325 companies in the Romanian automotive value chain, of which 936 form the core 2025 analysis universe, shows that deterioration in the sector first appears in employment, margins and the allocation of future production programmes, and only later in insolvency statistics.

Data analysed by INFINEXA show a widening gap between European demand and production in Romania. In the first half of 2026, new passenger-car registrations in the European Union increased by 5.7%, while vehicle production in Romania fell by 12.7%. The decline was 17.7% in Mioveni and approximately 7% in Craiova.

The issue, the analysis shows, is not merely a market cycle. Romania is gradually losing its traditional cost advantage, while value creation in the automotive industry is shifting towards batteries, electronics and software. Hourly labour costs in Romania’s manufacturing industry increased by 64% between 2021 and 2025, while industrial energy cost 43% more in the second half of 2025 than in Spain. At the same time, Romania still has no industrial-scale battery-cell production project.

Adrian Lotrean: “We are not simply experiencing a weak period for the automotive industry; we are seeing a shift in where value is created. Romania is strong in segments that are gradually losing value and less present in those that are gaining value – batteries, power electronics and software. For an automotive supplier, losing a contract no longer means simply losing a customer; it can mean losing relevance for the next generation of vehicles.”

Within Infinexa’s analysis universe, 13 of the 936 companies analysed for 2025 were in insolvency or preventive concordat proceedings as of 31 August 2026. If companies from 2024 that subsequently exited the 2025 analysis universe are also included, the number rises to 26 out of 1,077 companies, or 2.4%.

The report stresses, however, that these figures should not be interpreted as a contemporaneous measure of sector risk. Between the first signs of deterioration and the opening of formal proceedings, six to 24 months may pass. In the automotive industry, multi-year framework agreements and internationally structured ownership can further extend the period before a company enters formal proceedings. At national level, INFINEXA identified 303 collective proceedings opened in the first half of 2026, up 39.6% from the same period a year earlier.

Sector-specific and national data measure different phenomena and cannot be directly compared as insolvency rates. In a sector with five- to seven-year contracts, companies can absorb volume losses for a period through margin compression, followed by workforce and investment cuts and, ultimately, by consuming working capital. Specialists warn that by the time insolvency occurs, the opportunity for meaningful restructuring may already be limited.

Across the 1,200 companies present in all five years analysed, employment fell by 30,683 between 2021 and 2025, while turnover across the analysed automotive universe increased nominally by 35.1%. Most of the workforce reduction occurred among Tier 1 suppliers.

At the same time, margins narrowed. Net margin across the full analysis universe fell to 1.70% in 2025, from 2.07% in 2021, while Tier 1 suppliers reached 1.29%. One quarter of Tier 1 suppliers were already loss-making in 2025.

Working-capital pressure is adding to the strain: Tier 1 suppliers’ inventories and receivables reached RON 36.3 billion, equivalent to 30% of their turnover, at a net margin of just 1.3%.

Infinexa identifies several sector-specific signals that can precede formal proceedings by 6–24 months: losing a nomination for a new vehicle programme, a reduction in the number of shifts at the main customer, a significant deterioration in operating results, rising scrap rates without commercial compensation, financing costs exceeding operating margin, deferred maintenance and reduced trade-credit limits.

“For creditors, management teams and policymakers, the relevant question is no longer how many automotive companies are currently insolvent, but rather how many companies risk no longer being competitive for the next production programme, because the real window for intervention lies before the problem becomes one of insolvency,” adds Adrian Lotrean.

Infinexa estimates that if employment adjustment slows to 2–3% per year, the sector could lose another 12,000–18,000 jobs by 2028. If Romania loses a major production model, the impact could reach 35,000–40,000 jobs by 2030, while vehicle production could fall by 27–36% from 2025 levels.

The stakes extend beyond individual companies: according to the report, the sector currently generates approximately EUR 2.2 billion in direct annual budget revenues, while the loss of a major production model could mean direct budget revenues that are approximately EUR 380–530 million lower per year by 2030, alongside export losses of around EUR 2–3 billion annually.