Dacia surfs low price marketing – Companies

When inflation roared, Dacia thrived. The inexpensive Renault brand is developing and attracting new customers. It aims to double its volume from 1 to 2 million vehicles per year by 2030 by abandoning its relatively simple image.

Selling cars to individuals has become a real challenge for manufacturers: they keep raising prices and potential customers are paralyzed by inflation and the cost of energy. But Dacia is on its way there. While in Europe, the new market fell by 9.9% from January to September, Dacia registered 14.3% more vehicles compared to 2021.

Selling cars to individuals has become a real challenge for manufacturers: they keep raising prices and potential customers are paralyzed by inflation and the cost of energy. But Dacia is on its way there. While in Europe, the new market fell by 9.9% from January to September, Dacia registered 14.3% more vehicles compared to 2021. The inexpensive brand of the Renault group benefits from its marketing dividends based on low prices. As a good seller, the CEO of Dacia, Denis le Vot, rejected the catalog. “If you want the cheapest electric car, we have the Spring. If you’re looking for the cheapest compact, we have the Sandero. And for the cheapest seven-seater, the Spring is here again,” he said. at its Dacia stand at the Mondial in Paris in October, where all the cars on display had the brand’s newly extended logo. Price brings in new categories of customers who are undercut by price increases of generic brands. “There are people who have a little money and say to themselves now: ‘There is no question about putting 28,000 euros on a car, I will go to Dacia’, for example for the Jogger, a cheap seven-seater sold from 16,000 euros” , continues Denis le Vot. True, Dacia raises its prices like everyone else. For a long time, it was no longer the car brand at 5,000 euros, the price that the Renault group sought when it got its hands on the Romanian manufacturer more than 15 years ago. However, its offer remains cheaper than the generalists on the market: from 10,990 euros for a Sandero. These new customers come at a time when Dacia is revamping its image. Launched in 2004 to provide emerging markets, the brand quickly offered a simplified low-cost offer for the European market, with a simple design, reaching the private market with 85% of its sales. For two years, it has been trying to make itself more attractive to urban users. “We told ourselves that we have to repaint the car and give it a new logo”, continued the CEO. A more refined design since the last Sandero. “We make important but not necessarily ugly cars”, summarizes Denis le Vot. This development is the result of the arrival in 2020 of a new CEO at the helm of the Renault group, Luca de Meo. He reformed the organization and gave some autonomy to brands, such as the cheap but very profitable Dacia. And given a mission: to double sales by 2030, from 1 to 2 million vehicles, with an operating margin of 15%, against 10% currently. A premium level of brand profitability. And it seems to be a good start for the brand, which continues to grow. “This year in Belgium, it even became the leader of the brand in the retail market (individuals, editor’s note), specified Xavier Martinet, director of sales, marketing and operations. And for Europe, in 2021, we will be 6.2 % share in the retail market. We have now reached 7.2%. The strengthening of the brand also aims to generate new customers. “We are aiming for a new market to cover: vehicles in the C-SUV segment, compact SUV, continued Xavier Martinet. This is where we find the volume and the profit. It represents 20 to 22% of the European market.” This compact SUV market, which includes the BMW X1, Toyota Rav 4, VW Tiguan and Peugeot 3008, among others, makes all manufacturers salivate. The Dacia has a C-SUV, the Duster, which is at the lower end of the segment. But the brand is preparing a slightly larger model, called the Bigster, scheduled for 2025. Before that, “we have to strengthen the brand, make it more stable,” says Xavier Martinet. Because there are people in the niche. At the industrial level, the strategy consists in developing several models on a new platform, CMF-B, which is also used for in the fifth generation of Renault Clio. It will be available from the end of 2020 with the Sandero, then the Jogger, and soon the Bigster. The price is explained by production in countries with low labor costs, Romania and Morocco, as well as in t technology shared with Renault. “Without Renault, there would be no Dacia”, believes Denis le Vot. There is also a design that is very focused on costs. “For example, a Jogger weighs 300 kg less than an equivalent competing car, says Xavier Martinet. At the price of steel today, that saves a lot of money. very powerful engine for a lighter car.” Only downside: a lower ranking in the Euro NCAP crash test, due mainly to the lightness of the vehicles and the more basic driver assistance. The cars stick to safety regulations but aren’t built as well as a Renault or a VW. Other elements that reduce costs: a simplified offer with a limited number of options. On the recipe side, the very low starting price encourages most customers to buy well-equipped models. Finally, last trick: the customer does not receive any discount. The big hope is to offer a Bigster at a price that can still attract more new customers, and not just in France. “Six years ago, a vehicle in the C-SUV segment was sold for 29,000 euros, today it is between 34,000 and 35,000 euros. With Euro7 (engine standards from December 31, 2025, Editor’s note), it can we reached 40,000 euros”, notes Denis le Vot. He hopes to make a good move on the fare of the future Bigster. “You still have to be on the customers’ radar. The big C-SUV markets in Europe are Germany and Great Britain. A German or British doctor has to think that the Bigster is not bad…” Dacia is also distinguished by a shy electric approach. The brand does not announce explosions of electric models, like VW, Peugeot, Citroën and … Renault. He brought out a small electric, the Spring, made in China, very urban… but that’s it. Nothing is planned for the next five years. “That said, we are at the level of the market, because Spring represents our sales of the same proportion of electric vehicles in registrations in the European Union in recent months, or 12% to 13%”, the said Denis le Vot. He assumes this very slow approach to electrification is because Dacia is definitely targeting the market of those who do not want (or cannot) pay the current high prices for electric cars, which far exceed 35,000 euros for a compact model. This approach stems from a distribution of roles within the Renault group. The Renault brand is pushing electrification, at high prices, and developing technologies to be shared with Dacia. When their costs, no doubt, will be reduced thanks to the volume of sales. “We need to have a real answer from 2028 to the replacement of the current generation of Sandero, added Denis le Vot. Perhaps it is a car with 400 km of autonomy rechargeable in three hours at a rate of 30% less. expensive. Or a cheaper model with a range of 300 km. Our goal is to reach customers who don’t have much money in Berlin, Paris, but also in Poland.” Dacia is sticking with thermal engines for now, until 2035, when only zero-emission cars can be bought in Europe. “We will continue with very efficient, competitively priced small thermal engines,” said the CEO, who also has hybrid engines, now arriving in the Jogger. From 2028 an electric Sandero will be launched, but it will be a multi-energy platform. The model will still be offered with a fuel engine. Even after the 2035 deadline, the manufacturer will continue to produce gasoline-powered vehicles, as Dacia sells almost as many cars in Europe as abroad, one million in total. Fuel-powered vehicles will continue to make the rounds in South America and Africa, although electrification may also take hold here and there. “Measures are also being prepared in Brazil or India,” added Denis le Vot.

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