Dacia/ Renault

Dear readers,

Because of this untypical bad weather for this time of the year, instead of spending the Saturday outside in the nature as I usually like to do, I went to the Arena St. Gallen. This is nothing less than a shopping center, but not too big nor too elegant. However, I won't waste your time with reading how I spent my time there.



What?
What I want to talk about today is Dacia's acquisition by Renault and how things would have been for Dacia if it weren't for this event.

Why now?
On the main street of this shopping center there were exhibited three models of Dacia: the new Sandero, the already classic Logan, as well as the Logan Break.


So what?
This impressed me positively as I didn't expect to see a car "made in Romania" to be marketed in Switzerland any time soon.

Why so?
All this made me think of whether Dacia could have ever penetrated the Swiss car market if it weren't for Renault. As far as I understand the automobile market, this wouldn't have happened any time soon. Why? Because Renault is an already established player on the Swiss market, which has a lot of bargaining power when it comes to dealing with car dealers.
The scenario through which Dacia has succeeded to be present on this market could look like this: Renault requires from the Swiss car dealers to have at least one model of Dacia in their car exhibition besides the Renault models.
At the other end, it would have taken at least 10 years until Dacia by itself could convince the dealers of its market potential and attractivity to consumers.

Well done?
This strategy is a smart one I would say if we look at the macroeconomic trend, and namely at the recessionary period that we are now facing. If you read a basic microeconomic book, you will find that in such times consumers cut spendings on durable goods. What does this mean for the car industry? ....That consumers who really need to buy a car, will look for a cheaper one, which is still safe and offers the basic features of a car. Facts show that Dacia's sales have increased by 14% since previous year, whereas Renault's sales have increased by 2% in the same timeframe.