Why Dacia manages to stay affordable

The Romanian Dacia has been around since 1966, but gained momentum at the beginning of this century. Renault included the brand in its portfolio in 1999 and has since succeeded in establishing this branch as Europe’s only real budget brand, a role that the Russian Lada and the Czech Skoda played in the past. That gives Dacia a unique position, which has only become stronger in recent years. After all, the competition has been complaining for years that under pressure from regulations and demanding customers it has become simply impossible to offer really cheap cars in Western Europe. One manufacturer after another is withdrawing from the so-called A segment, the class that once stood for really small, really minimalistic and therefore relatively cheap cars.

Dacia acknowledges: €10,000 class is a tricky story

Dacia also acknowledges that this segment, once the €10,000 class, has become a difficult story. Nevertheless, the Sandero is the cheapest new car on the market in many European countries, including Belgium and Germany. This is just not the case in the Netherlands, but that is mainly due to the Dutch purchase tax bpm. That turns out to be a bit less favorable for this larger model than for the invariably much smaller alternatives that are for sale for this money. Even so, the Sandero is a great offer with us and that actually applies to all other Dacias. To clear up the most pressing follow-up question right away: yes, Dacia is making a profit. The brand currently accounts for a healthy margin of around ten percent, with a favorable outlook. It is therefore apparently possible to build a modern, yet affordable car, but the question is: how?

Hard plastics, simple upholstery on chairs

A first hint at an answer emerges when we take a closer look at any new Dacia. Many hard plastics are invariably used in the interior. The upholstery fabrics look quite simple and the less visible parts, such as the inside of the trunk and the mounting points of seat belts and seats, are clearly finished in a simpler way than we, spoiled Westerners, are used to. If you dive deeper into it, you can discover even more of these savings on your own. For example, complex options such as adaptive cruise control and digital instruments are simply not available and Dacia still uses an ‘old-fashioned’ monochrome on-board computer screen between the meters.

The interior of the Dacia Duster.

A heated seat position, buttons from Renault

Luxury that is available is often cleverly simplified. For example, Dacia’s keyless entry system does not use touch-sensitive door handles or buttons, but simply detects that the key is nearby or has disappeared. As a result, the car unlocks or locks itself. Seat heating is available, but only works in one position and with a button that, nice and simple, is placed directly on the seat base itself. The buttons themselves almost all come from Renault, whether or not from older models.

Nowadays new Renault technology in a Dacia

These are all ways to save costs, but on the other hand, this is not much better arranged in a Toyota Aygo or Volkswagen Up. Moreover, Dacia is already going much less far in this area than before. For example, the first Logan still had a fully symmetrical wing mirror, which could therefore be used on both the left and right side of the car. Modern Dacias sit and drive better than ever. Where twenty years ago the Romanians still used old Renault scraps for the drive, in the latest copies we simply find the small, modern turbo engines and even hybrid technology (Jogger) from Renault. So the question remains: how does Dacia do that?

Savings by not developing a Sandero with diesel

According to Xavier Martinet, Senior Vice President at Dacia and responsible for marketing and sales, the answer must go beyond the finish of Dacia’s cars. “We know that our success is due to the fact that we make affordable cars and of course we want to keep it that way,” he says to AutoWeek. “That’s why we always ask ourselves at every step in the development process: what is really necessary for this car? Take the Sandero. Does it really need a diesel engine to be successful? We don’t think so and saved millions of euros by not developing such a variant at all.”

Jogger lighter than other seven-seaters

Also with the Jogger, the most spacious and most up-to-date model in the Dacia range, the essentials were always sought after. Martinet: “What do people really need in such a spacious family car? Simple: that they can transport seven people. We did not have to develop a completely new model for this, but we were able to extend the existing Sandero platform considerably. The result is a car that is very spacious, yet weighs only about 1,200 kg. That is hundreds of kilograms less than other seven-seaters and that in turn means that much less steel and other materials are needed, which in turn saves money. Moreover, with less weight, less power is also required, so that you do not have to resort to complicated technology to reduce CO2 emissions,” says Martinet. For example, a single choice, namely to base the seven-seater on a compact hatchback, has positive consequences for all areas of the development.

Simpler shapes result in cheaper production

There is also quite a bit of profit to be made in the production process itself, as we hear from a source with a lot of experience at various manufacturers and suppliers. A less complex shape for steel body parts, for example, not only means less work for the ‘sheet metal’ department, but also that the anti-corrosion electrocoating reaches the smallest corner much more easily. That makes a difference, especially when hundreds of cars have to be treated in this way every day. The amount of sound insulation also plays a major role. A less complex product simply means that the production line can be shortened, so that fewer people are needed and therefore less energy and raw materials. Does that lead to lower quality? Not in terms of reliability and durability, our expert thinks. After all, simple often means reliable, and Dacia uses proven technology. Although the powertrains of the brand are modern today, they are still the first to find their application at Renault. This means that Renault is responsible for the initial problems and adjustments, aspects that are irrevocably addressed when a new engine or other powertrain is launched. The development costs are then recouped in the first period, while Dacia often only uses the relevant technology afterwards. Martinet expects that this will also work in the future, when Dacia will have to offer more and more electric cars. By using Renault technology, Dacia can participate in the prevailing trends, but without having to bear the costs and risks everywhere.

Part of the Dacia range, with the new logo.

Design to cost: first look at the costs

We are already seeing the benefit of this policy with the electric Spring and the Jogger Hybrid, Dacia’s first hybrid. Martinet: “For some markets, this hybrid technology is simply necessary to get CO2 emissions to the desired level, but we can still offer this car for less than 30 grand even in the Netherlands. It is precisely the fact that we belong to Renault that enables us to offer solutions like this,” he says cheerfully. This cooperation is therefore absolutely indispensable for Dacia, but the real ‘secret’, according to the Senior Vice President, is the philosophy that forms the basis of every decision. Martinet: “We call that ‘design to cost’. It means that we look at costs first in every aspect of our operation. That is precisely what makes this recipe so difficult to imitate.”