Romanian car maker Dacia targets record-high output in 2015

By Doinita Dolapchieva

Romanian car maker Dacia, a unit of France’s Renault since 1999, surpassed oil and gas group OMV Petrom as SEE’s largest company in terms of total revenues in 2014. The company’s revenues rose 2.2% to over 4.2 billion euro while net profit climbed 10.2% to 83 million euro on the back of increased demand for its no-frills, reliable models. Worldwide sales of Renault under its Dacia brand rose 19% to 511,465 vehicles last year, mainly due to the popularity of the Duster SUV and of the updated Logan and Sandero models. In Romania alone, Dacia sold 29,625 cars last year, accounting for a 32% market share.
In 2014 Dacia produced 339,000 vehicles at its plant in Mioveni, in southern Romania, close to its 350,000 annual capacity.

Nicolas Maure, Director General

Nicolas Maure, Director General

How do you explain the fact that Automobile Dacia’s net profit increased faster than its turnover last year?

The net profit was affected in 2013 by the financial integration of another Renault group subsidiary within Automobile Dacia. The operating result in 2014, more relevant to assess business trends regarding Dacia’s profitability, is similar to 2013 in percentage terms.

Do you plan to launch new models in the next 2-3 years? Can you elaborate?

Yes, there will be novelties in our range of models over the next few years, but we prefer not to elaborate on that for the moment.
In the short-term, we are revealing many new features at the Frankfurt motorshow like the Easy-R automated transmission for Logan and Sandero, as well as the Duster Edition 2016, including the new Sce 115 petrol engine and connected Media-Nav Evolution navigation system.

What are, in your opinion, the main factors influencing the company’s operations in a positive way this year? What about the main obstacles?

The market in Romania in 2015 was invigorated by the RABLA governmental programme for national car fleet renewal, which remained key for the automotive producers and importers.
It is a governmental scheme which refreshes the national car fleet, one of the oldest in Europe, to the benefit of all participants in traffic, to the benefit of road safety and of the environment. It is a useful programme for the Romanian industry and for the jobs in Romania, including dealerships. Trading new cars is a business that brings income to the budget and a business that ensures jobs.

There are a few things that need to be improved in order to facilitate any company’s operations in Romania. The first one is the infrastructure. Every week, more than 2,100 trucks – of Dacia and our suppliers – drive between Nadlac and Pitesti, which takes them up to 10 hours. We estimated that this leads to an additional cost of 30 euro for each Dacia vehicle. We appreciate it that the Pitesti-Sibiu project is a priority for the Romanian authorities. It is now essential to speed up the construction of this highway, aiming at completion by 2020 at the latest.

Then, talking about legislation, mainly the Labour and Tax Codes, any changes can affect our operations. We communicated our positions on these important issues to the Romanian government, stressing the need to reinforce our competitiveness on the market.

What are the company’s main investment projects in mid-term perspective?

The company continues to invest in industrial projects which enabled Dacia to increase the production capacities of the Vehicle and Powertrain plants, such as aluminum high pressure diecasting, 6 speed manual transmission capacity increase, mechanical parts, progressive introduction of robots, etc.

In 2015 we will invest around 100 million euro in the Mioveni plants in order to support the introduction of new models and variants, as well as continue the modernization of the industrial platform, with a focus on working conditions, safety and automation.

Do you plan to increase the plant’s  output capacity and staff?

Today, the output capacity of the Mioveni plant is 350,000 vehicles per year. There are no plans to increase it in the foreseeable future. Nevertheless, we may increase the production of powertrain units – engines, transmission – based on market demand.

How many vehicles does Dacia plan to manufacture this year, how does this compare to 2014?

Production in 2015 will increase compared to the last year. We will most probably enjoy a record production level this year. In addition to complete vehicles production, we also started significant shipments of painted bodies and components to the new Renault plant in Oran, in Algeria, for SKD assembly of Logan there.

What sales volume and market share do you target in Romania this year?

As of end of June 2015, Dacia’s sales in Romania totaled 18,369 units, up by more than 25% compared to the first half of 2014, while our market share reached 35.3%, showing a 3 percentage points progress over the same period of last year.

How do you see the overall car market in Southeastern Europe (SEE) developing in the next few years? What about Dacia’s performance in SEE?

The figures advanced so far by the Belgium based Association of European Car Manufacturers at the end of the first half of 2015 show a small increase of car sales in this region. We cannot make an estimation for the whole year. Still, we are confident that 2015 will end with a new sales record for the Dacia brand.