No one, not even former Renault CEO Louis Schweitzer whose idea it was to buy Dacia in 1999, had any idea the low-cost Eastern European sub-brand would succeed this well. The Romanian automaker with three wheels in the ground at the time of its takeover was purchased the same year that Renault took its stake in Nissan, and no one had much to say about that smaller deal. Fast forward 13 years, the line that began with the Logan in 2004 is now five model lines on sale in 36 countries, it's year-on-year sales have never decreased and the vehicles built on its M0 entry-level platform sold nearly a million units in 2012. This isn't just an emerging-market story, either, with Dacia branded offerings making up 17 percent of Renault volume in Western Europe.

Its rampaging sales and the synergies between the Renault and Dacia lines have turned the brand into a "cash cow" in the words of Renault's COO. Its vehicles share a huge number of parts, many of which are still carryover nine years into the brand's life, and parts of the recently introduced second-generation Logan are evolved from the 1990 Renault Clio. In fact, due to amortization and decreased prices for parts because of the massive sales, the new Logan is less expensive to produce than the first generation, so it was given new equipment along with the refresh in order to maintain its price.

The news is even better in other regions, where the Dacia can command more money on its own or can be sold under the Renault or Nissan brands. The Duster in Western Europe that starts at 12,000 euros starts at 19,000 euros in Brazil. That's how Dacia, according to a Morgan Stanley analyst, returns a worldwide nine-percent operating margin as opposed to Renault's 0.4-percent. What lies ahead is more models and variants, as well as a modular strategy for the M0 platform to further reduce costs, and, one supposes, even more money from that Romanian cow.


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    • 1 Second Ago
  • 26 Comments
      mbukukanyau
      • 2 Years Ago
      James May is their best talking head.
      Iosif Bogdan
      • 2 Years Ago
      Renault, Dacia and the euro crisis are a hell of a combination. Renault has the lion's share of merit for what Dacia is today because at the end of the '90s they acted on their vision to create a cheap car that is not crap. Renault understood that you can't just lower the price of a car by making cheaper versions of high quality components found on your more expensive models. They also understood that you can't introduce artificial handicaps on your cheaper cars just to ensure they don't compete with your expensive models. So Renault decided to use well engineered and production tested older components in new cars. The problem was where to build them. Dacia was a perfect complement for Renault's need. It's located in .RO, a country culturally compatible with .FR. The main factory is within a single hour time zone difference. .RO could provide skilled engineers for any required positions (including R&D, a large part of which is currently being made in .RO) but, perhaps most importantly, the people working at the old Dacia had their priorities straight when it came to what's important in a car. This is something that, I think, was brought to the table by the old Dacia. Unfortunately, it's not a quality that Dacia can be too proud of because it's something that just came from operating under communism for 30 years (having to make do with close to zero resources was no extraordinary challenge, it was the rule of the land) The evaluation of what's needed on a car must've made for some entertaining meetings between the engineers/managers from the two companies. I'm amazed you can have leather seats as an option nowadays because the philosophy at Dacia is that you can roll your own damn windows up, in-door window motors is just one more thing that can brake so leave them out. The same applies to in-mirror motors/heaters, you can adjust them manually. The bumpers just need to be black plastic because you'll bump them and this way they're cheaper to replace. The wheels need to be made out of steel because it's cheaper and it won't crack when you hit a pothole with the rim. You need space. Lots of space to carry all sorts of **** around. You need a reliable engine that is cheap to run and maintain. It should yield hundreds of thousands of kilometers without it being a special accomplishment. Finally, you need the final price to be cheap enough to sell well in .RO. That's tricky, to say the least. Fast forward to 2008, the first product of the new Dacia, the Logan, was already on the market for 4 years and doing well while the Duster was in the works. Time for the financial crisis to strike and make everyone reevaluate their priorities. Also time for Dacia/Renault to really reap the benefits of everything they've done so far. When every penny counts there's really nothing beating a Dacia and that's why it's currently making waves in Europe. I hope they'll continue to do well and enjoy their place on the auto market. They deserve it.
        Leather Bear
        • 2 Years Ago
        @Iosif Bogdan
        "Dacia was a perfect complement for Renault's need." The fact that Dacia had been making cast-off Renault R8 and R12 models for years for local consumption also helped integrate Dacia into the Renault family after the Iron Curtain's fall.
          Iosif Bogdan
          • 2 Years Ago
          @Leather Bear
          I don't think this had any kind of quantifiable value for Renault. The R12 was designed in the late '60s and its production ended in 1980. Dacia still made its locally modified version in 1999, when it was took over by Renault. No car components or production line machines could be reused for the newer Logan / Duster models. Renault made quite some investments to modernize Dacia's factories. The old relationship might have given Dacia some good will with Renault but nothing beyond that.
      • 2 Years Ago
      [blocked]
      pallentx
      • 2 Years Ago
      Well that's a headline I would have never imagined that I would read someday. When I was in Romania a decade ago or so, I talked to a guy who was complaining about his Dacia. He pointed to a Lada and said something like "THAT is a GOOD strong car.
      The Wasp
      • 2 Years Ago
      And we're told to believe that Europeans simply have more discerning taste when it comes to cars...
        sparrk
        • 2 Years Ago
        @The Wasp
        Mainly old people and young people who just finished school are buying these cars, the cash for clunkers programs makes them an extremely good deal.
        aatbloke1967
        • 2 Years Ago
        @The Wasp
        Wasp, if you we're worldly and well-travelled, you'd have the appropriate knowledge yourself based on your own experience and observations, and wouldn't even need to make such a statement. Maybe once you're out of nappies and have a career under your belt?
          The Wasp
          • 2 Years Ago
          @aatbloke1967
          I'm not sure what you're trying to say, aatbloke. Are you saying that Dacia cars really are cutting-edge in some way? Are you saying that European cars are better not because they're "better" but because being developed over a decade ago, in some cases, is somehow better? I'm not sure how one could be worldly but I certainly am well-traveled. Therefore, I must have the appropriate knowledge to make such a statement. I do not wear "nappies".
          aatbloke1967
          • 2 Years Ago
          @aatbloke1967
          Really, Wasp? So who tells you Europeans have a more discerning taste? Notoriously superficial American society, perhaps? If you're well-travelled and worldly wise, you wouldn't have even posed the statement. You're simply relying on what American culture dictates about European goods, and budget brands such as Dacia then really don't compute with your spoon-feeding. My advice to you would be to spend a number of years working and living in Europe. Then you'd know exactly how discerning Europeans are and to what aspects of their societal values.
          aatbloke1967
          • 2 Years Ago
          @aatbloke1967
          Mikoprivat, just one of your numerous pseudonyms. I'm very grateful to have a privileged education, but I do appreciate that there are many out there - such as yourself - who don't have those opportunities. Even so, the day has still yet to arrive when you actually make an intellectual and factual post on this blog. Any hope of you demonstrating automotive knowledge, however, has long been written off.
          mikoprivat
          • 2 Years Ago
          @aatbloke1967
          ...and if would have gone to school and study when you were young, you would know how to write today!!!
      carfan
      • 2 Years Ago
      pretty sad state of affairs for Europe if a POS like Dacia is becoming a cash cow. Either we Europeans lost our edge ib style and discerning taste of aesthetics or we became poorer than the asians. Maybe bothh....very sad!!!
        sparrk
        • 2 Years Ago
        @carfan
        Or maybe Europeans have realized that you need cars for transportation, not to for something to eat your savings.
          mikoprivat
          • 2 Years Ago
          @sparrk
          no, the europeans realized that they don't have money, and even the ones who have money are scared shitless to spend it in light of another economically desastruous year. When europe was prancing and dancing a few years ago in a relatively decent wealth, this car was practically unknown in Westwern Europe. Only the eastern european hicks bought them mostly romanians and bulgarians
      throwback
      • 2 Years Ago
      In hindsight we should not be so surprised. Well built inexpensive cars, that are good on gas, is a natural to sell well. Considering the average transaction prices of cars in Europe and the USA there is definitely a market for these cars.
        to your email L
        • 2 Years Ago
        @throwback
        Well in the US we do get a variant of it as the Nissan Versa.
          aatbloke1967
          • 2 Years Ago
          @to your email L
          The first-gen Sandero used the same platform as the Tiida/Versa, which was an extended variant of that used in the Clio. The second-gen Sandero uses a significantly modified version of the platform which so far is unique to newer Dacias.
      Alex
      • 2 Years Ago
      Dacia Sandero!
      tcbcapri
      • 2 Years Ago
      I think we all know this is down to James May and his plugging :P
      • 2 Years Ago
      [blocked]
      Top Stig
      • 2 Years Ago
      When i glance at it quickly, it looks like the MP4-12C
      sanmusa
      • 2 Years Ago
      What this article doesn't mention is that in Brazil, the world's fourth largest car market by sales volume, the Dacia cars are sold as Renault. Ask a Brazilian about Dacias and they have no clue what it is. But ask them about the Renault Sandero and they all know it.
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