Strategic management Business modelling [607421]

Strategic management & Business modelling
Final Individual Assignment
-Dacia as part of the Renault group –

Tiberiu -Mihai Mihailescu
FABIZ IMBA

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Automobile Dacia S.A. is a Romanian vehicle producer that was established in 1966, and has been
a subsidiary of the French vehicle maker Renault since 1999. It is Romania's top business by
income and the biggest exporter, establishing 8% of Romania 's exports in 2018 .
The name of the company, Dacia was chosen in honour of our ancestors, the mighty Dacia ns that
once lived in the grounds on which today lies our country.
The story of Dacia began in 1966 when the company was established under the name of “Uzina
de Autoturisme Pitesti”. Two years later, in 1968, the first factory opened its doors in Mioveni,
near Pitesti and in the same year, it produced the first model, the Dacia 1100, a licensed variant of
the Renault 8. The production of this model, the Dacia 1100 went on from 1968 to 1972, period in
which almost 38 thousand vehicle had been produced.
Dacia has risen in popularity during the communist regime, when Dacia 1300 and Dacia 1310
were used as state vehicles. For example, the Dacia 1300 was used as police cars and the Dacia
Break, a variant of the Dacia 1300 model was used as ambulance.
The business model of Dacia was from the beginning making of affordable cars that are also
resistant and tailored for the people of Romania. The resistance of the early models of Dacia, such
as the 1100, 1300 and 1310 is upheld by the still prevalence of these models on the streets of
Romania, either in the country -side, where the Break model is used for carrying goods for
households, or in the cities, where these models have become collector’s items and are restored
and driven by people as works of art.
In the 1990’s Dacia had put out its first vehicle completely designed and produc ed in Romania,
without any ties to Renault, the Dacia Nova. This model war released to mixed interest from the
people, as the design was rather outdated and the model had problems with rust and safety.
In more than 34 years of production, more than 2.5 million units delivered, the Dacia 1300/1310
effortlessly turned into the most well -known vehicle on Romanian streets. An enormous number
of individuals had gotten proficient at doing fixes or home -made changes. For instance, numerous
more established vehicles had more current front finishes united onto them to cause them to appear
to be increasingly present day, or absolutely in light of the fact that more up to date parts were
simpler to get. Thusly, unique mid 1300s are very uncommon, with costs consistently expanding
for the bes t-saved models. Tuning of Dacia cars is likewise a famous leisure activity, despite the
fact that the home -made nature of a significant part of the work provides reaso n to feel ambiguous
about the degree of value, wellbeing and unwavering quality of the completed item.
It was a popular belief that during the Communist r egime, in the plant where Dacia vehicles were
made, there were two production lines: one line creating Dacia cars expected available to be
purchased in Romania and the other line delivering a similar vehicle (though from improved parts,
and amassed with more prominent consideration) for send out. Romanians living close to the
border would usually buy their Dacia in neighboring countries anticipating a more elevated level
of quality.

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The associations with Renault will be continued toward the finish of the 90's. On July 2, 1999, the
agreement is marked by which the French gathering gains the larger part stake of the producer
from Mioveni. Dacia in this way turns into the second brand of Groupe Renault Romania.
Following a broad and yearning speculation program, Dacia is experiencing a phase of profound
modernization and change that will come full circle with t he dispatch, in 2004, of the Logan model.
Image of a genuine resurrection of the brand, Logan speaks to the beginning stage not just of the
improvement of the Dacia model offer yet in addition of a rash universal development.
In September 1999, Dacia was p urchased by the Renault gathering, with the end goal of making
Romania its center point of car advancement in Central and Eastern Europe, and speculation was
thusly expanded. The principal indication of this came in 2000, with the presentation of the
SupeR Nova, an improved adaptation of the Nova with motor and transmission from Renault. The
highest point of -the range variant had cooling, electric windows and a CD player. Deals were
awesome, in spite of the fact that the obsoleteness of the idea was striking . Dacia sold 53,000
vehicles in 2002 and it holds a right around 50 percent piece of the pie in Romania.
In 2003, a restyled rendition supplanted the SupeRNova with Dacia Solenza, improved inside , the
options for an airbag. This was, be that as it may, jus t intended to be a temporary model filling the
requirement for a cantina model before the presentation of the terrifically significant Dacia Logan,
just as to acquaint laborers with the requests of assembling a model adequate to Western European
markets. C reation was halted in 2005.
The Dacia Logan is the best selling model since the first 1300. It was presented after extensive
media enthusiasm for August 2004, and in spite of configuration related analysis, it got one of the
top-selling vehicles in Central and Eastern Europe, just as Russia. The Logan is sold in numerous
nations, at times under the Renault brand. It was granted 3 (out of 5) stars in NCAP crash testing.
It stays by a long shot the top rated vehicle in Romania, involving a 43% portion of Dacia 's
complete Romanian deals in 2015. A diesel adaptation was additionally presented in 2005. Prior
to its dispatch, it was known as the 5000 -Euro vehicle because of its anticipated dispatch cost. This
was never fully the case, despite the fact that it is pr obably the least expensive vehicle for its size
available.
In 2010, the Dacia Duster was displayed at the Geneva Motor Show. It is the primary crossover
SUV worked by Dacia since the Renault procurement, in 4×2 and 4×4 variants. It was uncovered
on 8 Decem ber 2009, and opened up in Europe on 18 March 2010.
In 2012, Dacia Lodgy, another conservative MPV, was uncovered at the Geneva Motor Show. It
is built on another platform and is made at an all -new Renault production line in Tangier, Morocco.
The Dokker, d ischarged in June 2012, is a marginally smaller leisure activity vehicle, likewise
fabricated in Tangier, having a similar platform with the Lodgy, accessible in traveler and board
van variations.

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In September 2012, the second ages of the Logan and Sandero were uncovered at the Paris Motor
Show. They include a typical front end plan and accompany improved standard security includes,
another motor and other new comfort hardware.
In 2020, Dacia report ed that they would be discharging an electric vehicle which they declared in
March, 2020 as the Dacia Spring. The Dacia Spring is set to turn into the least expensive electric
vehicle in Europe with the cost being assessed by Romanian media at around €15,0 00 to €20,000.
(Wikipedia, 2020)
Over the years, Dacia has differentiated itself from its competitors by producing a vehicle that is
designed for the average consumer, for the average Romanian, being both affordable and having
a value for the money, hence Dacia’s motto: “ Generous, reliable, simple, smart and always
accessible! ”, it is really a description of the brand and of the Romanian people towards foreigners;
we do everything in our power to be welcoming and friendly as is Dacia to its customers.
Having a business model that rev olves mainly on creating affordable cars to satisfy its customers’
basic needs, it really shines from a value for money point -of-view, in the words of Francois
Mariotte, commercial director for Dacia : the cars that they put out are “shockingly affordable”.
This shows that the cars are intended for the average consumer and they really do get their value
for the price that they are paying for the car. For example, the Dacia Logan model starts from a
jaw dropping 11,990 euro, a price that hasn’t really a direct competitor on the market for a new
car.
Dacia really profits off of the “smart buy” phenomenon, which opposes the industry trend of
making cars more powerful, luxurious, and thus more expensive.
Dacia realizes this business model by keeping the costs involved with the car manufacturing as
low of possible.
Renault administrators state the recipe is basic: Use just existing innovation and keep the choice
rundown short, stay away from benefit sapping i mpetuses and non -retail deals channels, and
manufacture client reliability in unpredictable ways wit hout costly promoting efforts.
Expenses are held within proper limits by parts sharing (the doors of the new Duster are similar to
the past age Logan, for instance) just as ease fabricating in Romania, Morocco, South America
and somewhere else. Benefits are floated by keeping away from rental deals channels and
motivators.
Beginning in 2015 , we had the first renewals for Dacia customers, thus implying that clients who
purchased the new Dacia cars constructed after Renault's acquisition – beginning with the Logan
presented toward the finish of 2004 – had chosen to purchase another. Simultaneously, Dacia keeps
on drawing a huge level of purchasers from t he tra de-in vehicle advertise.
More than half of Dacia purchasers presently stay with the brand when they purchase another
vehicle. Around 10 percent are originating from Renault and the lay are proceeding onward from

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utilized vehicles or another brand. Inside Dacia, some Logan and Sandero proprietors are moving
to the more costly Duster .

Dacia’s strategy is not to push vehicles on clients , by discounting, r ather, they promote a 'pull'
framework that attracts clients to the bran d by making a faithful after.
One way Dacia has done this is through its yearly picnics for proprietors. The current year's French
outing, held in July, drew 10,000 individuals with the expectation of complimentary diversion,
entertainments and food – and test drives of new models. (Automotive News Europe, 2018)
Today, Dacia scarcely looks like the feeble organization that the Renault Group obtained for just
$50 million out of 1999. At that point, Dacia was undercapitalized, experiencing quality issues and
as yet selling vehicles dependent on the Renault 12, which was firs t worked under permit in 1969.
In spite of the fact that Renault paid "practically nothing" for Dacia it has put 2.8 billion euros in
the brand since the buy, including 2.2 billion to change the huge assembling complex in Pitesti,
north of Bucharest, into an advanced car production line equipped for building vehicles that satisfy
both Western European guidelines and the requirements of p urchasers in creating nations.
The plant can produce one vehicle like clockwork, or 450,000 every year, just as motors and
different parts for Renault Group production lines in Europe and North Africa. A neighboring
provider’s park with 1,500 occupants is moored by Valeo and Faurecia. Inside, 800 robots
includi ng cooperative "cobots" work nearby somewhere in the ra nge of 12,000 representatives.
Renault and Dacia officials state the accentuation has been on improving seen quality – fit and
finish, or what purchasers contact and feel. The 32 -km test track at the Titu building focus has a
residue passage and segments intended to recreate wet, sloppy and rutted streets that are found in
many developing economies where Dacia ’s and Renault's other Global Access vehicles are sold.
Plastic parts and paint are exposed to outrageous war mth and daylight seat testing.
Future changes to Dacia's setup incorporate an update of the Lodgy minivan, another Sandero
likely dependent on Renault's coming fifth -age Clio, and a Duster variation – albeit a reputed
seven -seat SUV was as of late precluded. Dacia may likewise wind up thinking about more tight
European discharges measures coming in 2020 -21 and past, in light of the fact that purchasers may
not be eager to pay for expensive half breed or full electric drivetrains.
This is how Dacia, when thought about a risky bet , has become Renau lt's worldwide benefit source.
Europeans think about Renault's Dacia arrangement as modest, passage level models that contend
with utilized vehicles for deals.
Be that as it may, Dacia vehicles are manufactured and sold the world over, regularly badged as
Renaults and sold at at tractive costs – and benefits.

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Renault doesn't report singular outcomes for its brands, however Morgan Stanley appraises that
Dacia has a working edge of 9 percent, which is progressively r egular for premium automakers.
That is uplifting news for Renault, whose worldwide car unit in the initial a half year of 2012
revealed a wor king edge of just 0.4 percent.
The brand likewise has one of the most minimal vendor edges in the district, roughly 5 percent of
the retail cost.
Dacia can do this since its sellers are not required to assemble their own stores. Rather, they share
showrooms with existing Renault businesses. (Automotive News Europe, 2013)
Dacia’s business model is rather unique in the automotive industry before it does not address the
medium to high consumer market as most of the other car manufacturers on the market.
For example Volkswagen, one of the top car manufacturers and one of the mo st affordable between
the brands from group of which it belongs, the VAG group, the Volkswagen AG group. This group
consists of Volkswagen, Audi, Skoda, Seat, Ducati, Lamborghini, Porsche, Bentley and Bugatti.
Volkswagen addresses the medium to high consumer market whereas Dacia targets the low to
medium consumer segment.
This is evident from both the design perspective and the quality perspective, Volkswagen having
a more polished design and better quality components, as opposed to th e utilitarian approach Dacia
takes, that focus more on affordability with the caveat of luxury and comfort. The best example of
this is the fact that the cheapest models of Dacia Logan often do not have air conditioning.
In conclusion, Dacia is a brand tha t is and always has been focused more on affordability rather
than luxury and this business model has benefitted them from the company’s inception in the
1960’s. This business model has become synonymous with Dacia and this is shown by the fact
that Dacia vehicles have often been used by a lot of businesses as company cars, as well as national
departments such as police, ambulance and fire department. As an example of Dacia’s appeal and
influence, in 2019, when the Pope visited Romania, his holiness has cho sen a Dacia Logan as a
preferred means of transportation in our country.

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References
Automotive News Europe, 2013. How Renault's low -cost Dacia has become a 'cash cow'.
[Online]
Available at: https://europe.autonews.com/article/20130102/AN E/312259994/how -renault -s-
low-cost-dacia -has-become -a-cash-cow
[Accessed 03 06 2020].
Automotive News Europe, 2018. How Dacia maintains strong growth despite reluctance to
expand lineup. [Online]
Available at: https://europe.autonews.com/article/20180907/ ANE/180909858/how -dacia –
maintains -strong -growth -despite -reluctance -to-expand -lineup
[Accessed 03 06 2020].
Wikipedia, 2020. Automobile Dacia S.A.. [Online]
Available at: https://ro.wikipedia.org/wiki/Automobile_Dacia_S.A.
[Accessed 03 06 2020].