Summary
- Dacia, a division of Renault, is known for manufacturing inexpensive cars for basic transportation
- Dacia is developing a new electric city car for Europe with a target price of less than €18,000
- The new car will be manufactured in Europe to avoid import tariffs and boost profitability
- The new Dacia model will be based on the Renault Twingo platform and developed in just 16 months
- Renault had a successful year with a record operating profit and aims to maintain a high operating margin in 2025
Article
Dacia, a division of Renault known for producing inexpensive cars, is developing a new electric city car for Europe to succeed the Dacia Spring. Unlike the Spring, this new model will be manufactured in Europe and priced at less than €18,000. It will be based on the Renault Twingo’s platform, offering improved performance, technology, and capability. The fast 16-month development of this new model is part of Renault’s Leap 100 initiative, aiming for a 100-week development window for all new cars. The car will have fewer components, lower production costs, and will be part of Dacia’s strategy to broaden its portfolio.
Renault had a successful year, reporting a record operating profit of €4.26 billion and a slip in the operating margin to 5.9%. Despite the challenges faced by the company, such as the crisis in 2020 and the fallout with alliance partner Nissan, Renault’s CEO Luca de Meo managed to turn the company around. While its European peers were issuing profit warnings, Renault emerged as a standout performer. The company’s focus, discipline, hard work, and passion were praised by de Meo at an investor meeting, highlighting the reliability and success of Renault in turbulent times.
Dacia is setting a target timeline to launch the new city car around mid-2026, preceding the release of the third-generation Sandero as an EV. Dacia’s CEO, Denis Le Vot, emphasized the importance of developing an electric city car due to the thin profit margins of ICE solutions. By utilizing Renault platforms and minimizing development costs, Dacia aims to offer competitive pricing while maintaining profitability. The upcoming models will contribute to Dacia’s lineup expansion, following the launch of the Bigster SUV and other C-segment models in the next two years.
Renault’s operating margin may stay above 7% in 2025, according to CEO Luca de Meo. Despite facing challenges like the Russia-Ukraine conflict and the disintegration of its alliance with Nissan, Renault achieved better-than-expected results, outperforming many of its competitors. Analysts liken Renault to a card player maximizing every point, showcasing its size, speed, and agility in the automotive industry. De Meo acknowledged the hard work and dedication of Renault’s team, highlighting their ability to break records and deliver exceptional results in challenging times, contrasting with the struggles faced by Nissan after ending its partnership with Renault.
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