The Chinese are coming to the UK and the rest of Europe with an influx of low-cost models, or so they keep saying. Likewise, barely a month goes by without an established manufacturer – Volkswagen and Ford being recent examples – talking about launching their own budget brands.
And all because of the success of Renault’s budget arm Dacia. The Romanian firm launched into Western Europe - and now beyond - nine years ago and is on track to sell an estimated 360,000 vehicles in 2013 at a growth of 18 per cent year-on-year.
I sat down with Dacia’s brand director Rafael Treguer at the Frankfurt motor show today, and asked him if he had any intell on when we might see the Chinese head west, or when an established car maker would launch a Dacia rival.
“We analyse and observe all brands, not just the Chinese,” he said. “All the competition and their potential, we know about. But remember even if they launched tomorrow, we have a nine-year head start with a complete range of models and sales of 360,000 units.
“I’m not sure when exactly the Chinese will launch here, but we’re observing.”
Treguer laid bare the complexities of launching a budget brand, and how the budget approach needed to be consistent in every single aspect of the business – from the amount of money spent of advertising campaigns to leasing deals – for it to work.
And even for Dacia nine years on, there’s still an immense amount of work to get to where it wants to be. “The brand is still poorly known,” Treguer said. “In advertising, sponsorship, events, we have to be very careful and clever and keep prices low, doing a lot with a small budget.”
Reliability is also crucial, said Treguer, saying having an unreliable car can do huge damage to a low-cost brand where the spend of every penny has to be closely watched. “We, like any other budget brand, will be sold in countries where the roads are very poor, so you need to have a car that performs consistently and reliably in those conditions.”
Likewise, jamming the cars full of equipment adds in cost and complexity, so there’s a strict policy at Dacia of only adding in what the customer wants, not just increasing the content for the sake of it.