Dacia in Less Than 10 Years Dacia,

Dacia

In less than 10 years Dacia, the Romanian car manufacturer, has risen to great success. This success began when, in 1999 Renault's CEO Louis Schweitzer made a move to acquire this company. Both of these automobile companies were not performing to high standards at the time, but now, things are different and success has been very rewarding since this merger. The purpose of this essay is to review this decision to combine forces and what were the strategic elements involved in this transactions.

According to Dacia's website, "As a brand of the Renault Group, Dacia uses clever sourcing and proven technology to ensure its cars are reliable, robust and affordable. From the Sandero hatchback to the Duster SUV, Dacia cars are simple to use and affordable to own." Dacia has found a soft spot in the low-end auto market and it seems to be paying big dividends for the company. It is therefore important to investigate some of the mitigating details that went into the strategic development of this decision and how it has since affected the performance of both companies.

Ramsey (2013) wrote how some of this developed. He suggested that Dacia's rampaging sales and the synergies between the Renault and Dacia lines have turned the brand into a "cash cow" in the words of Renault's COO. Its vehicles share a huge number of parts, many of which are still carryover nine years into the brand's life, and parts of the recently introduced second-generation Logan are evolved from the 1990 Renault Clio. In fact, due to amortization and decreased prices for parts because of the massive sales, the new Logan is less expensive to produce than the first generation, so it was given new equipment along with the refresh in order to maintain its price."

Marketing has also played a large role in how Renault has made Dacia a winner in such a short time. The marketing director of Dacia, Stephen Norman, suggested that "Dacia managed both to establish itself in Western Europe as an active renown brand and to establish the low-cost idea as an attractive concept, such as Ikea or H&mM. The economic downturn forced, or rather encouraged, consumers to reconsider all their absurd prejudices on semi-premium cars." This combination of marketing and operation alignment appears to have been a solid strategic approach.

Dacia still appears to be growing and reaching out to new markets. More new models are planned on being introduced and the flexibility in brand management also assists in this way. Dacia, Renault and Nissan are different branches of the same company whose names have different levels of appeal in different market segments, both geographical and otherwise. This flexibility also significantly contributes to the way in which this company can continually expand and gather more competitive advantage away from its competitors.