The French car marque Renault has been around since 1899. Fast forward to 2011, and it was Europe’s third-biggest car manufacturer. It was also the world’s ninth-biggest car marque.
But in 2014, the brand has been struggling to make a profit due to a slump in European sales. A recent news report suggests that things aren’t so bad for Renault at the moment – thanks, in part, to budget car brand Dacia.
How has Dacia has saved the day?
Dacia is a Romanian car manufacturer that has been around since 1966. It is a budget car marque, and most of its models take their roots from old Renault models. 33 years after Dacia was set up, Renault had bought the firm out.
The Romanian car brand was recently introduced back into the United Kingdom with many new models. These models use Renault’s engine and drivetrain technology, but are otherwise designed by Dacia.
Elsewhere in the world, Dacia cars sell under the Renault brand. According to the Thames Motor Group, low prices are the reason Dacia cars have been selling like hotcakes across the globe.
The demand for budget cars
Many countries struggle to revive their economies because of recession and global economic outlooks. Consumers are cautious with their spending, and that is one of the reasons for Renault’s poor sales track record.
It’s no secret that growing numbers of people are opting for used cars rather than new ones. Car manufacturers are trying to find ways to tempt buyers into buying new again. Aside from the cost, there are other factors that are driving motorists to buying Dacia cars:
- Utilitarian design – Dacia cars are basic, no-frills vehicles. Their models target motorists that just want a vehicle that gets them from A to B in relative comfort;
- Reliability – the engines used in Dacia cars are the same ones that Renault use. Consumers aren’t worried about Dacia cars breaking down often;
- Lifestyle choice – Dacia offer models to suit many lifestyles. For example, the Sandero is a family hatchback, and the Logan MCV is perfect for growing families.
The facts and figures
Removing the Dacia success story, it seems there are many reasons why Renault hasn’t been doing so well as of late.
For instance, Renault invests in the electric vehicle market and have done so for some time now. But one of their models, the Fluence, has been a flop. In the UK, a 12-month old Fluence is only worth about 30% of the brand new price.
The French firm is hoping to revive its fortunes and reverse this sad state of affairs. They have recently stated that the new Clio model has helped to increase global sales to 1.37 million vehicles.
Although global sales have dropped by 9% outside of Europe, the Dacia brand has helped to boost European sales. In Europe, there has been an 18% growth. Could Dacia hold the key to Renault’s future success?
The figures above seem to suggest so, especially in markets where economic growth is slow.