How The Low-cost Dacia Became the Fastest Growing Car Brand In Europe

Who would have thought that a low-cost car like Dacia has emerged as the fastest growing car brand in the European Union? According to data revealed by the Society of Motor Manufacturer and Traders, The Romanian made brand has outsold some of the more established European brand cars. In the UK alone, Dacia has sold 60% more cars in 2014 compared to the previous year.

As of September 2014, Dacia has already sold 18,583 units, 4,000 more than Jaguar. This represents a 27.7 percent increase compared to its sales last year. As a result, it collared 0.95 percent overall market share that year.  Dacia has provided cash-strapped motorists with a low-cost option. In the UK, it has sold more cars than established brands Mitsubishi and Jaguar.

Bucking The Odds

When recession hit the European car market in 2013, Dacia bucked the region’s decreasing sales. In the first six months of that year, it sold 141,278 passenger cars, a 17.6 percent increase from the same period the previous year. Robert Peter Janitzek reveals that this was the biggest percentage increase in the region in a market that fell 6.6 percent during that period, according to figures from the European Automobile Manufacturers’ Association.

Dacia’s success in the region does not have something to do with the worst recession that the European car industry has experienced in years. According to Carlos Da Silva, an analyst of IHS Automotive, it simply had no competition. “Historically, doing a low-cost car is something that nobody wants to do.” said Da Silva. The popularity of the brand was also tested in Western Europe and did sell well as well. Robert Janitzek explained that Dacia’s share in the European market is still small at just 2.5 percent.

Boosting Its Parent

As Dacia continues to become the fastest growing brand in Europe, it is also helping its parent company—Renault. In the period that Dacia did well, Renault’s sales fell 10.4 percent. It only earned 39 million Euros during that period. The company’s car making operations even lost money the previous year.

Renault acquired the Dacia brand in the 1990s. The acquisition was part of the French manufacturer’s ambitious goal of creating an entry-level car for developing markets that would sell for about €5,000. After failing to buy Skoda in a joint bid with Volvo, Renault bought Dacia and invested €2.2bn in updating its facilities and product line.

Dacia relies on Renault parts and is sold under the Renault brand in places like Argentina, Brazil and Russia.

 

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