Editor's letter: The case for Dacia moving upmarket
Chunky 4x4-style cladding, as on Stepway models, is one way for Dacia to 'enrich' cars
Dacia must "enrich the car content" to remain competitive and profitable as inflationary pressures hit
The current-generation Dacia Sandero was launched in December 2020 as Britain’s cheapest car – priced from a whisker under £8000. Today, less than three years later, the most affordable version of the Renault Group brand’s hatchback costs £13,795.
That cars are getting ever more expensive is no secret: inflationary pressures, the increasing cost of legislative compliance, logistical headaches and supply constrictions are together conspiring to hike up the list price of cars from all brands and in all segments. But the impact on Dacia is arguably most tangible given its historic billing as the purveyor of the cheapest cars on the market.
Although its cars remain among the most competitively priced in their respective fields, bargain-basement pricing structures are no longer Dacia’s modus operandi, and the days of the sub-£10k Sandero are long since past. Not only that, but the brand will now expand its range upwards to compete in the fearsome European C-segment, armed with the Skoda Kodiaq-rivalling Bigster and two more future models besides. These cars could feasibly take Dacia well into the £30,000s in range-topping forms – a realm that would have previously been unthinkable for the Romanian brand to occupy.
But, as Dacia’s sales and marketing boss Xavier Martinet explained, striving to be the market’s cheapest car brand is a precarious position to occupy. “At the end of the day, you can be interesting at £9000 with a basic customer proposition, you cannot do it at £13,000, £14,000, £15,000. At that price level, for a basic car, a low-cost car customer would go to the used car market,” he said.
Plus, the need to remain profitable means the relentless pursuit of volume at all costs is no longer a viable business model. “With the evolution of pollution and ADAS expectations as well, and with the GSR2 (safety regulations) coming, we cannot build a £9000 car any more and make money out of it,” added Martinet.
And the second another marque sees fit to undercut your cheapest car by knocking a few quid off their equivalent model, that’s your unique selling point out the window.
Which is why Dacia’s pricing uplift is as much driven by free will as it is obligation. “We’re forced by regulation, but at the same time I want to say it’s also a choice,” said Martinet. “Because if your only purchasing reason is price, there’s always the risk that somebody will be cheaper than you, and so you’re quite vulnerable. Giving more value to the brand, to the vehicles, is a way to make us less vulnerable to the attack of anyone – any existing competitor or any newcomer.”
Martinet says Dacia must “enrich the car content” to remain competitive and profitable, while maintaining the astounding volumes it has achieved in Europe. The Sandero now ranks as the region’s best privately selling car and the Duster is not far behind.
That ‘enrichment’ comes courtesy of add-ons like chunky 4x4-style cladding, extra kit, slick new colour options and fun accessories like the Jogger’s campervan-aping Sleep Pack and a lairy sticker package for the Duster. Dacia may have vocally shunned the costly electronics and gizmos required for a five-star Euro NCAP safety verdict, but equipment that can be demonstrated to actively enhance the ownership experience – and put its cars more obviously on a par with rivals – is fair game. It’s telling, perhaps, that more than 70% of Dacia models are now specified with the top trim package. “When people say ‘I’m buying a Dacia – I’m buying a cheap car’, it’s wrong because they’re not buying the cheap one,” said Martinet.
The real test will come when the brand finally starts to transition to a pure-electric line-up, a move it will make with the next-generation Sandero in four years’ time. Pricey battery hardware means this electric supermini – related to Renault’s hotly anticipated reborn 5 – will no doubt bring another hefty price increase, even if it uses second-hand underpinnings and technology from its parent company.
But what’s interesting is that Dacia won’t let this inherent cost uplift stand in the way of its steadfast commitment to good-value motoring. “We will go for a shorter range and longer charge times,” pledged CEO Denis Le Vot, swimming gamely against the tide of volume manufacturers pushing for their EVs to offer 600 miles between charges and warp-speed top-up times. “We want a cheaper price for the customer.”
No doubt Dacia’s tried-and-tested formula of minimising weight, equipment and options – together with the suggested integration, even, of cheap sodium battery chemistry – means it can make good on this pledge. But in the context of a market environment beset by soaring prices across the board, “cheaper” is an increasingly relative concept.