How Dacia Became Renault’s Cash Cow
It was only natural for the French giant to purchase Dacia when it went up for sale, in 1999. After building a transitional model, called the Solenza, Dacia hit the big time with the Logan, which at first was sold in ‘emerging markets’, but in a few years after its launch, it became a common sight throughout the whole of Europe.
Now, with the updated range of cars, which will also go on sale in the UK, Dacia is set to gain even more popularity. However, they are already doing great and bringing in a lot of money, for Renault, according to the French brand’s COO, Carlos Tavares, who has called Dacia a cash cow.
The exact profit figure was not revealed, but a very interesting piece of information was - the fact that Dacia has a 9% operating margin, which puts it on par with established premium automakers. This is achieved through the clever use of old Renault parts, which are reliable and require no further investment in their development, as well as the fact that the cars are built in countries where wages are low - in Morocco, workers make less than €4 per hour.
Also, future prospects are good, according to Arnaud Deboeuf, Renault’s entry-level models boss. "We will remain true to Dacia's basic goal: a no-frills, practical car," he said, then added that "So far, we have always sold more cars than the year before since the launch in 2004 [ . . . ] Why would that be different in 2013?"
Story via autonews.com