Renault’s announcement on Tuesday that it would split its businesses to better prepare for an electric, low-carbon future included news that it would float its Ampere EV division and hints that another entity – the emergent premium brand Alpine – could also be spun into a future stock-market listing.
But also coming out of the Renault Capital Markets’ Day was the fact that one of its most profitable brands was Dacia, which will remain firmly inside Renault’s new Power division for ICE vehicles, with no plan to even give the brand its own P&L (profit and loss) balance sheet.
Dacia is the brand that uses Renault’s thoroughly tried and tested (and amortised) platforms and engines to provide a budget alternative to buyers who don’t mind being a little bit out of date in return for a new vehicle at a decent price.
Renault doesn’t separate out Dacia’s profit from the Renault Group as a whole, but Group CEO Luca de Meo was more than happy to provide a bit of colour on Dacia for the assembled investors and analysts on Tuesday.
“Dacia is one of the group’s golden nuggets,” de Meo said. The Romanian brand, he said, posted “double-digit” profitability and set a target of 15% profitability for 2030.
Some probing from analysts revealed from group chief financial officer Thierry Piéton that Dacia contributes about 20% of Renault’s automotive revenues. Put another way, Dacia’s margins and percentage share of revenue are to the Renault Group what Audi’s are to the Volkswagen Group. That's remarkable for a budget brand, rather than a premium one, making it an enviable asset – especially as the core Renault brand has only recently moved back into profit (no margin figures were given).
This asset is one that Renault plans to sweat with a move to bigger C-segment (compact) vehicles and a planned doubling of sales from below one million now to two million by 2030, all using the same CMF-B platform. Not all will be badged Dacia, as Renault uses its own badge on some of the budget models in emerging markets, but all will use the same formula that increasingly will be seen on larger vehicles like the forthcoming Bigster SUV (pictured below) and two more planned C-segment vehicles.
“This is the Dacia magic potion,” de Meo said. “Dacia will remain Dacia but only gets bigger.”
The company aims for 40% of all Dacia sales to be in this larger segment by 2030. “B-segment cost, C-segment revenue. This is the recipe for 15% [margins],” Piéton said.
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