US car manufacturer Ford announced on March 22 it will invest up to €200mn to produce the Ford EcoSport small SUV at its plant in the southwest Romanian city of Craiova, starting in autumn 2017.

The €200mn investment will be shared by Ford design, engineering and production departments and only part of it will be directed to the Romanian production unit.

Ford has been present in Romania since 2008. So far, it has invested more than €1bn in its Romanian manufacturing operations, according to the group’s representatives.

The production of the new car model will boost the Romanian car production industry, which accounts for almost half the country’s exports.

“EcoSport sales are up nearly 30% this year and given the continued outlook for sales growth in the small SUV segment, it’s the right time to move EcoSport production to Europe and take advantage of the excellent workforce and operations we have in Craiova,” Jim Farley, president and CEO at Ford of Europe, said in a statement.

Ford currently produces EcoSports for the European market at its Indian Chennai vehicle assembly plant. The Indian plant will continue to build the model for domestic Indian sales and for many export markets.

The announcement that production will be moved to Craiova follows productive discussions with the Romanian government on developing a framework to help Ford transition from its existing investment to this new opportunity and to help maintain the global competitiveness of the Ford Craiova manufacturing operations, the US car manufacturer noted.

Ford currently produces the Ford B-MAX multi-activity vehicle and the 1.0-litre EcoBoost engine at its Craiova plant. It said it will continue to seek opportunities to build further products in Craiova so that it can fully utilize the facility’s capacity and assets.

Ford has commited to launch five new vehicles to compete in the SUV and crossover space in Europe in the next three years, starting with new Ford Edge in the second quarter of this year. The car manufacturer expects to sell more than 200,000 SUVs in Europe for the first time in 2016, which represents a growth of more than 30% compared with 2015.

Romania is also home to car manufacturer Automobile Dacia, run by Renault. The head of the German car manufacturer Daimler, Dieter Zetsche, recently said Romania might be picked to host a factory. However, international media has suggested that Slovakia, the biggest car producer per capita in Europe, as well as Poland and Hungary are also being considered as potential locations for the plant.