Automotive & Business: At the 2022 Paris Motor Show, Dacia presented its new identity to the public, focused on the outdoors. How does this change also affect businesses?
Xavier Martinet: At the moment, many people have the impression that Dacia is attractive for the price. Five years ago, there were people who didn’t put our models on their shopping list. Now, the brand has even cooler targeting. In addition, with Spring or Jogger, we are able to create offers that are not in line with the market.
A&E: The energy crisis and industrial shortages have upset the balance of the automotive market. How will Dacia have a card to play?
XM. : Since the beginning of 2021, price trends have widened the gap between Dacia and its competitors, giving us more opportunities. This development will continue with new safety standards in 2024 and Euro 7 pollution control in 2026. More and more customers are coming to Dacia, because they cannot keep up. At the risk of taking customers from the second-hand market.
A&E: How do you reconcile this price positioning with the increased quality of the products you claim?
XM. : Thanks to the ability to make bold decisions, for example when we designed the Spring that offers 300 km of electric autonomy in the city for less than €20,000 but with a speed limited to 125 km/h. As for the Jogger, it weighs 300 kg less than its competitors, but the weight of a car is key in the equation for reducing CO2 emissions. Similarly, when we offer LPG, we reduce CO2 by 10% and fine particles by 90% for an additional cost of a few hundred euros compared to a few thousand with the hybrid.
A&E: Unlike Renault, Dacia does not have a sales force dedicated to companies within its network. What is your approach to this?
XM. : Most of our sellers remain “bi-branded” in Europe. They are able to sell Dacia like Renault as long as we don’t go beyond 20 to 25 different products, but this is an evolution that we have to integrate in the future. Today, Dacia’s profitability is similar for private and business customers. Because of this, we don’t want to build fleet sales if it means lowering our profitability.
A&E: But your business’s sales continue to grow. Besides the competitive quality/price ratio, what arguments convince them?
XM. : Beyond the first vehicle life cycle, the key point is residual values and our ability to remarket our used vehicles after three or four years. Today, finding a Dacia on the second-hand market is complicated because they sell well and quickly.
A&E: Another important point that fleet managers expect from you is the negotiation of sales prices. Are you in favor of this?
XM. : For 18 years, we have given zero discount on our competitive base prices. What is interesting for a company is the value that remains to be supplied, so the main factor is the residual value. In our five European markets and depending on the model, our RVs are 7 to 12 points better than those of the competition. In addition, these residual values have risen sharply, putting the current impact of price increases into perspective.
A&E: Does this approach apply to corporate customers through VR rather than discounts across all fleet types?
XM. : Like individuals, small businesses are interested in a price while large fleets are looking for a TCO. Initially, we are not planning to come into force in the large account and long-term rental market. Our ambition is to spy on “user selectors” and small fleets. But our desire is to develop sales in companies for this, we need to create a second-hand car market within 3-4 years. We are working on it even though, with the supply crisis, we are still struggling to increase the volumes produced.