By on February 13, 2009

Renault’s low cost, made-in-Romania Dacia brand can’t believe its luck. In Germany, orders are upsixfold says the Financial Times Deutschland. Due to demand stoked by the Euro 2,500.00 clunker car program, sales have taken off for low-cost cars. The newish, normal-looking Dacia Sandero usually sells around 80 units per week. Suddenly, they’re moving 1k. Unfortunately, Dacia lowered production at its Romanian plant weeks ago, in expectation of collapsing Russian and Eastern-European markets. The cars are so sold out—to the point where Dacia is buying cars off the Russian market to satisfy German demand. Dealers are rubbing hands and hiring helpers: a German dealer has students serving coffee to customers waiting in line to order cars.

Positives: it’s good to hear of a car maker that can uphold a profit margin of six percent even in bad times. The more that money goes to Romania, the less will be needed to support ailing banks in Transylvania. And the Dacia is not a bad car, for the money. More to the clunker-culling policy point, there are hundreds of thousands of poorish people who drive to work every day, need a car, but can’t afford to replace a 15-year old heap. For them, what amounts to a once-in-a-generation opportunity to buy a new car (for €5k) is a blessing.

Negatives: it sounds like the making of a manic-depressive market to me. Boom now, tears soon: we’ve heard that story before.

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16 Comments on “Dacia Eats Up German Cash for Clunker Bucks...”


  • avatar

    Golly, one could almost think that America, too, might be ready for low end microcars….if the offshore car manufacturers would cannibalize their entry level models. Naaah, never happen. And I’ll believe VW importing the Polo (GASP, the same size as the original Rabbit, why would it sell here??) when I see it on the show room floor

  • avatar
    Martin B

    Talk about unintended consequences. I’m sure the German policymakers never intended their scrapping allowance to benefit Rumanian factories.

  • avatar
    no_slushbox

    Maybe Germans are buying these because the keyed/locking wheel centers bring back fond memories of their ’80s Golfs.

  • avatar
    FromBrazil

    OMG! Here we go again…

    It’s no Dacia. It’s a Renault. Bsed on a NEW platform. With parts bin galore of previous generations and a simple, but honest interior. It’s got solid mechanicals, a surprsingly wonderful suspension and hence ride, and in internal space a couple of notches up from its price range.

    In other words, it gives you the best French cars have always given (sturdy mechanics, wonderful and supple suspension) with none of the complications they’ve (probably, like ummm, maybe the Germans???) never mastered (electronics).

    So you got a basic car, priced under the likes of a Polo, BUT way BIGGER. It’s bigger than a Corola, Civic, Focus inside, but the price is along the lines of Puntos, Fiestas, Ka, Corsas etc. (the Polo is a bastard child in terms of price, VW charges a premium and some poor schmucks buy into it). Go check the specs…I just won’t be bothered.

    Yeah, and I got a Renault Logan so I should know. I love it when people say their cars are perfect but need a little bit more space inside and in the trunk. I laugh and point at my car, smug in the knowledge i paid 20k USD less for roughly equivalent cars. You see, down here, Corollas, Civis and Focuses (Focii??) are luxury cars! (LOL!!)

  • avatar
    AndrewDederer

    Margins, that’s what it is. I guess Germans with junkers (so to speak) can swing 5000 euros worth of cash and financing. 2500 euros wouldn’t even make a dent in GTI prices. At least it looks like some actual (if expensive) good might come out of this program yet.

  • avatar
    Robert Schwartz

    So is this a different car than the Nissan Versa in the US?

  • avatar
    Martin Schwoerer

    Robert Schwartz: it’s a re-thought and decontented Versa, so to speak.

    The Dacias are actually pretty intelligent. A previous-generation Renault Clio, but with the costly parts re-engineered. For example, the dashboard is a single-piece unit. Looks primitive (or at least spartan), but ages well and is never prone to squeaks or rattles.

    The Dacia setup is pretty variable. First was the Logan, a frumpy family car. Then came the Logan station wagon, which offers incredible carrying capacity on a wheelbase as long as the MB E-Class’. Then the Sandero, a Logan with nicer styling. Now, introduced soon, a Pickup truck, a van, and a SUV. All for less than 10k €, in other words, at the price level of used cars.

  • avatar
    6c1500

    I just returned from France, where I drove my daughter’s new (6000km) Dacia Logan wagon. A big little car–think Peugeot wagons of the 60s-70s. This one is a 1500cc Diesel, 5 speed. Very well made and nice driving car. About Euro 11000. Everything looks and feels substantial. My biggest criticism: the interior looks bland and shiny-80s plastic cheap. If it were sold here, it would have a 20% share of new car market in Berkeley. The only option would be a delete….of the otherwise standard equipment Obama bumper sticker

  • avatar
    dzwax

    These things would sell like mad here. There is a huge untapped market of new car buyers that would jump at this.

    I’m thinking of my first new car, a 1975 Honda cvcc

    Oh, I forgot, Americans only want big, fully loaded cars.

  • avatar
    no_slushbox

    dzwax:

    As others have mentioned above, we have basically the same car in the US with the $9,990 (about 7,770 Euros) Nissan Versa. It shares the Nissan B platform with the Logan and Sandero.

  • avatar
    John Horner

    It sounds like the incentive is having the desired effect. People who otherwise wouldn’t be in the car market are scrapping their relatively old, higher polluting vehicles and getting into something new and economical.

    Romania is part of the EU, and I suspect that many of the components come from all over the place. Even if a goodly part of Germany’s stimulus spending ends up helping keep Romanians working, it is better than the alternative.

    Now, where are the good, cheap cars for North America?

  • avatar
    tparkit

    I don’t think we’re immune to this sort of vehicle. A few weeks ago I read that Honda is refining a micro-car (IIRC, something they build for the Japanese market) for possible import.

    If they bring it over, I’ll expect they’ll sell them hand over fist.

  • avatar

    This is a relatively cheap (€1.5b) program that creates a lot of excitement, dealer traffic and sales.
    It gets old cars off the road and people into showrooms that otherwise wouldn’t be there. It also makes manufacturers think building affordable cars. Definitely better than dumping tax payer money down bottomless pits.

    Of course the program favors smaller cars, because €2.5K make a bigger impact on a €10K car than on a €100K Merc. And that’s an intended consequence.

    It favors those small and affordable cars, no matter where they come from. Romania, Japan, Korea, Germany, Italy. Hats off to an absence of myopia.

  • avatar
    John Horner

    “Of course the program favors smaller cars…”

    Unlike the provision the US Senate recently put in the stimulus package to make sales tax on new vehicles tax deductible. Ta da, a big benefit for those buying $100,000 vehicles, but very little for Aveo buyers. In our part of California the sales tax is 8.25%, or $8,250 on a $100,000 vehicle. Buyers of such vehicles are probably in the 35% marginal tax bracket, so 35% of $8,250 = $2,888. Unfortunately, giving that person a tax break probably doesn’t add much economic activity as anyone with the bucks for a $100k new car/truck in this economy will make their purchase decision independent of the value of a relatively obscure tax break.

    If you are going to use tax breaks or credits to incentivize car sales, a well crafted clunker credit makes far more sense than the sales tax break.

  • avatar
    Steven Lang

    Yeah and no.

    A clunker credit can definitely create activity on the lower end of the scale.

    The problem we have in North America is that overproduction has taken place for such a long period of time, we may never see anything more than a little bump.

    A similar phenomena is taking place with the tax refunds. People are actually putting most of that money towards used cars instead of new ones. The value differential between the two is simply too great these days for most folks to buy new.

  • avatar
    threeer

    guys, we already have small cars similar in nature to the Dacia here in the States. Problem is, nobody here really wants small, decontented cars. We like ’em big over here (as idiotic as that is for the actual usage of the majority of the cars on the road). I’d not mind a simple, honest and fun car like this. Reminds me of my 89 CRX Si. Simple and immensely fun. Too bad all we want is Tahoes, Yukons and such (that is, when we’re actually buying anything).

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