Bulletin of the Transilvania University of Braşov • Vol. 4 (53) •No. 1 - 2011 Series V: Economic Sciences

STRATEGIES OF DACIA ON INTERNATIONAL MARKETS

Mihaela FUNARU1 Gabriela FUNARU2

Abstract: Sustainable development is one of the main axes of action of the Renault Group. This means that a company should not only be concerned by its profitability and growth, but also by the impact of its actions on the environment and society. The company must be attentive to the concerns of civil society, where NGOs are the true spokespersons. This is the philosophy of the Dacia Renault company.

Key words: global strategy, international markets, emerging markets, sustainable development, recyclable product.

1. Dacia Renault In 2008, Renault signed a strategic The Renault Group is present in 118 partnership with Russian manufacturer countries and is organized into five major Avtovaz, acquiring 25% of its capital. regions: Europe, Euromed, Russia, Asia, In 2008, the Renault Group sold Africa and the Americas. Dacia is part of 2,382,230 vehicles and registered a the Euromed region development, outside turnover of 37.791 million euros. the United States, which also includes: Renault- Alliance ranks the fifth Bulgaria, Moldova, , Belarus, place in the world between carmakers, with 5.962 million personal vehicles and and North Africa (Maghreb). commercial vehicles produced in 2008. A The Renault Group now has 39 industrial percentage of 37% of total sales for 2008 sites and over 129,000 employees. were made outside Europe. All Renault industrial sites have received Dacia is the second brand of the Renault ISO 14001 certification for environmental Group. It is the pole of development of the protection. Owner of three brands, Renault, Renault Group in Central and Eastern Samsung and Dacia, the Group designs, Europe. Its mission is to produce modern, develops and markets personal vehicles robust, economic designs and adapted for and commercial vehicles. new markets and expectations, needs and Together with the Japanese manufacturer resources of new customers. Nissan, Renault created in 1999 the Dacia fully benefits from its membership Renault-Nissan Alliance, a common to the Renault Group, relying on the platform in terms of technology expertise and organization of the parent development, product strategy and sales. company at the industrial and commercial level.

1 Department of Doctoral School in Marketing. Transilvania University of Braşov. 2 Economist, Department of Tourism and Foreign Affairs, Braşov City Hall.

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The distribution network of vehicles and brand Dacia Renault Group, with the main spare parts of Dacia Renault is extended in mission of supporting the development of most countries. the Group on emerging markets. The Renault-Nissan Alliance is a In 2000, Dacia launched the first model, strategic partnership established between SuperNova, which is the first the two leading international companies, materialization of the French-Romanian Renault and Nissan, which hold the cross - cooperation, a car equipped with a Renault shareholdings capital. and gearbox. The trademarks of Alliance are Nissan In 2003, Renault owned 99% of Dacia and for Nissan, and Renault, Dacia Pitesti. and Samsung for the Renault Group. Dacia is one of the key brands of the 2. International Markets of Dacia Renault Group and the Renault-Nissan . ILN Centre (International 2.1. European Market of Dacia Renault Logistic Network) from Mioveni delivers Western Europe is the first destination assembly parts for Logan plants in for Dacia exports. In addition, Dacia was , Colombia, Russia, Iran, India, the fastest growing brand on market in Brazil and South Africa. Western Europe in the first half of 2009 (+ In May 2008, a gearbox for Renault- 99.8%). Nissan (Renault Mécanique Roumanie) The European market is a free one, cars was inaugurated on the platform of Dacia can be sold without any restrictions. Pitesti plant. faces the situation of having From the beginning, there have been many cars in stock, and Germany demand strong links between Dacia and Renault. was so great, so Dacia cars went to that Since 1999, Dacia has been part of the direction. Renault Group and it is increasingly Two thirds of Dacia sales are made for affirming as an international brand. export, while a third is in Romania. So, all The construction of the automobile depends on the evolution of these markets. factory from Pitesti began in 1966. Dacia has 51 export destinations, but After a license agreement was signed 60% of these deliveries are to Western between Renault and the Romanian state in Europe. 1968, the manufacturing of Dacia 1100 All forecasts for Western Europe began under license R8. indicate a 15-20% drop in sales, Between 1970-1980, Dacia developed a considering the overall market. range of models that included various Dacia main markets are and types of passenger and commercial Germany. Here, governments have already vehicles. implemented recovery plans and the results Year 1995 marked the launch of the first of these plans will have an impact on sales. car designed 100% by Romanian In Europe, in 2009, Dacia recorded engineers, . increasing sales to 91% (214,292 units, The company obtained the Certificate of corresponding to a market share of 1.3%). Quality System Implementation ISO 9001 In 2009, the main markets were and ISO 14001, the environmental Germany, France and Italy. Germany certificate. On 2 July 1999, it signed the became the first export market, with privatization contract and became the 84,875 units sold. The second place was

Funaru, M. et al.: Strategies of Dacia Renault on international markets 33

France, with 66,531 units, followed by 2.2. Other markets of Dacia Renault Italy with 21,754 vehicles. In the Maghreb countries (Morocco and In 2009, Dacia had a share of 2.13% on ), Dacia has become a major player the German market, 2.5% on the French in the local auto market. Sales in Morocco market and 0.93% on the Italian market. In have reached 18,100 units (up 21% France, Dacia entered the top 10 brands. compared to 2009, while the local car Dacia continues to strengthen its success market in the same period has decreased in Western Europe, three quarters of cars by 9.4%). In Algeria, Dacia sold 17,300 exported by Dacia have been registered units in 2009 (increasing by 42% in a since the beginning of the year. market down 2.7%). Dacia has recorded the strongest rise in Dacia currently sells cars in Morocco, sales of all brands of Western Europe Togo and Nigeria under its own brand and market (+ 29.2%). in South Africa under the Renault brand. Dacia podium exports are dominated by Also in South Africa, they sold Dacia the three countries which have not only the Logan Pick-up under the Nissan brand, largest car markets in Europe, but the most renamed NP200. powerful industries on the continent. Reunion, Kenya and Senegal are France became the main market for Dacia countries with potential, where Renault has (64 287 units sold). offices, but it has been reluctant until now In late June, it was ranked sixth in the to bring Logan and Sandero models. standings Hexagon sales with a market Dacia made its first steps into the new share of 4.5%. strategy of "conquering" Africa. After In the first half of 2010, Dacia was Logan, Logan MCV, Logan and situated on the fourth position on the Logan Pick-Up, Sandero has made its French market, taking into account only debut in June on the Morocco market, sales to individuals. where it already owns the second ranking Germany is on the second place on position in sales after Renault. For international sales of Dacia cars (17,107 example, Logan has sold 48,000 copies in vehicles were sold), followed by Italy with Morocco from 2006 to present. 13,755 units. To boost sales, Dacia-Renault decided to Duster, the sixth Dacia model, has made assemble Sandero at the Renault factory in a notable entry in all markets where it is Casablanca. Dacia will benefit, because marketed. Since its launch in March, more 60% of the parts will be made at Pitesti. than 35,500 units of Dacia Duster have Dacia and Renault, which are based on the been ordered in Europe. Logan platform, are also produced in Dacia cars are exported in Ukraine, Romania, Russia, Colombia, Iran, India, Turkey, Spain, Serbia, Czech Republic and Brazil and South Africa. Bulgaria. A market with great potential can be Along with increasing sales and found in the Persian Gulf, where dedicated diversifying, Dacia began the development models have already been built, which of its own showrooms on Western Europe include features such as automatic gearbox market, separate from those of Renault with five reports. (but still relying on the Renault network).

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3. Dacia Renault Strategies prejudices in terms of the semi-premium Since the re-launch of the Dacia brand in models. Western Europe in 2004, with the Dacia is a separate brand within the appearance of Logan, Dacia has never Renault Group's brands and therefore it denied the low positioning of the brand, in competes with Renault. Dacia is perceived terms of price. While Logan and Logan as a low-cost product. The image of Dacia break (a unique concept with seven seats) is placed under Renault. are probably described as low cost because The image of brand Dacia has become of the design and the target audience, in the most aggressive in Romania (local 2008, Sandero revolutionized Dacia again. market), North Africa (emerging market) Dacia proposes a low-cost, a spacious and Germany (saturated market). Since hatchback and an attractive design for March 2010, after the Geneva Motor Sandero. Show, the company has wanted to impose In fact, due to the introduction of their brand image “in each and all”. Sandero, Dacia has succeeded in two very The Dacia brand development occurs at a important points: first, the idea of brand very fast pace. The market shares are "Dacia" has surpassed the Logan in increasing in all Western Europe, reaching Western Europe - Dacia brand has become a value of 3.5% in Germany in May. an active known name, then, low-cost idea Unquestionably, Dacia is currently the has become something great, like Ikea and most dynamic car brand in Europe. This H&M. performance is explained by pertinent The Pricing strategy aimed to maintain models, which benefits from an unbeatable the price level of Dacia models as low as report of interior space/benefits/price. possible and with as small a margin as In Romania, Dacia has consolidated its possible. leading position; even in the current All advances in productivity that have difficult context, the only player on the passed the products were made and automotive market has managed to transferred to the benefit of the customer. consume the full quota in the first stage of For example, ABS has become the series the program REMAT. Dacia promised to equipment, as well as the dual air bag, come through this program with a redesigned versions of the Logan sedan complementary offer, which doubles the and Beak were introduced, the warranty value of the disposal amount. period was extended to 36 months. Dacia innovates and looks to the future. All these things have been done for As proof of its creativity in design, the clients without modifying the prices for 2 company presented at the Geneva Motor years and a half. The price could not be Show its first concept car, called Duster. lowered more. Dacia is involved in the The model range, the youngest in Europe, program REMAT and announced a was already enriched in June with the financial package to help customers who Stepway Sandero version, Logan MCV want to buy a Dacia car. Prestige version and a new engine, 1.2 Dacia brand “Made in Romania” is the 16V, more economical and one which had the most important role and, environmentally friendly. of course, the economic downturn forced All this set of developments will help or, rather, encouraged consumers to think Dacia conquer new market segments better and to give up their rather absurd progressively, address the young and

Funaru, M. et al.: Strategies of Dacia Renault on international markets 35 female audience and respond to new needs Vehicles bearing the eco ² signature of the Romanian and European clients. already exist in Dacia range and in As part of the business strategy, the Romania. company decided to use the Duster model All Dacia cars are recovered in a ratio of to launch the Romanian brand on one of 95% and contain 5% recycled plastic; in the most demanding, but important addition, the industrial plants of Mioveni markets of Europe: the United Kingdom. platform have ISO 14001 certification. The launch of Dacia in the UK and the Regarding CO2 emissions, these cars rest of the Western European markets that meet the conditions of eco ²: Sandero dCi are currently not covered is the second 70, Sandero dCi 85, Logan dCi 70, Logan pillar of the firm's strategy of building a dCi 85, Logan MVC dCi 70, Logan MVC structure with dedicated sales. dCi 85, Logan Pick-up dCi 70, Logan Pick Over the last two years, Dacia has been up dCi 85, dCi 70 Logan Van, Logan Van the car brand with the fastest growth in dCi 85 (with emissions of pollutants Western Europe, even if, initially, the cars ranging from 120 g CO 2 / km to 140 g CO that produced at Pitesti were rather 2 / km). dedicated to emerging markets around the world, not to the developed ones. 4. Conclusions When they decided to build a car like The market strategy of the Dacia Renault Logan, the company was based on company is considering expansion into extensive market studies that said there new markets and for new segments of was an important segment of customers consumers. In order to achieve this who needed a simple, not very expensive, objective, it has proposed using a strategy but reliable vehicle to meet their basic of continuous renewal and diversification need for mobility. of its products. Also, in order to extend The environmental strategy of Dacia its market and increase market share, the meets the principles of sustainable company has established a strategy of low development strategy of Renault. It aims to prices, which should reflect, at the same maintain ecological balance, reduce the time, an appropriate price-quality ratio. impact of company activities on the On the Romanian market which is still in environment and enhance compliance with sharp decline because of the economic the environmental imperatives regarding crisis, Dacia has sold in the first half of this the lifetime of the vehicle from the design year 19,294 vehicles, which corresponds to phase until the end stage of use. a market share of 33.5%, up to 3.5 points The car production is done in compliance from the same period in 2009. with the ISO 9001 quality management The result recorded by Dacia is based on and ISO 14001 for environmental the continuous search of best deals in protection. terms of price, product range and Eco ² signature is a certification of the financing, plus the quality and reliability of fact that Dacia cars fall in the long-term products, confirmed by recent surveys of environmental strategy launched by customer satisfaction. Renault in 2006. The target which the Dacia offers accessible cars. In each group set was to reach the top three global market segment where it is present car manufacturers in terms of the low level (hatchback, sedan TRICORP, station of CO2 emissions. wagon, van, pick-up, and now 4x4), Dacia

36 Bulletin of the Transilvania University of Braşov • Vol. 4 (53) • No. 1 - 2011 • Series V proposes reliable and robust vehicles at an recycled materials; it is also involved in unbeatable cost-benefit ratio. With a range the Remat program of renewal of the auto of six models launched in just six years, fleet. Dacia is an expanding brand worldwide. This year Dacia has been involved in the Dacia produces a wide range of vehicles program of auto fleet renewal initiated by Dacia (Logan, Logan MCV, Logan Van, the Romanian Government, offering Logan Pick-Up and Sandero), , customers an offer entitled "Dacia gearboxes and transmissions, aluminum Advantage". During this campaign, Dacia pieces for Dacia and Renault vehicles has sold 14,000 vehicles this year. produced worldwide. It can be said that Dacia is a growing TL gearbox manufactured at the Dacia company which is positioning to a medium factory equips different Renault models level in terms of quality of their products (Clio, Modus, New Kangoo, Mégane, and prices offered, but offering a good Scénic, the new Laguna) and Nissan quality-price ratio. models (Tiida, Sentra, Versa, Latio, Livia, Note, Qashqai). References At the same time, Dacia assumes social responsibility towards consumers and the 1. http://www.daciagroup.ro environment, implements a sustainable 2. http://www.financiarul.com development strategy by designing and 3. http://www.capital.ro producing environmentally cars using 4. http://www.zf.ro