Renault COO Carlos Tavares may not be exaggerating when he calls Dacia a “cash cow”. A report in Automotive News suggests that the low-cost marque may be as profitable as some premium brands.
Dacia’s operating margin, according to a Morgan Stanley report, is said to be around 9 percent – closer to luxury brands than mainstream lines. By comparison, Renault is said to have an operating margin of 0.4 percent. With most mainstream auto makers struggling to make a buck, the notion that a low-cost car can be profitable is astounding.
Aside from building their cars in developing countries, Dacia employs a number of strategies to keep the cars profitable and the money flowing. In countries where their products are sold as Renault cars, prices are much higher – a Brazilian Renault Duster will sell for at least 20 percent more than an EU-market Dacia Duster, all thanks to the little badge on the hood.