When Romania was still locked behind the Iron Curtain, few people outside the country had heard of the Dacia car.
Today it is the fastest growing brand in Europe. Sales rose 35% in the first six months of this year, according to the European Automobile Manufacturers Association.
Before it was bought by Renault SA in 1999, the Dacia factory was turning out 110,000 cars a year but with Renault it is producing 340,000 cars. More than 17,000 of them were sold in the UK last year – a record for a new UK car brand launch.
In the first eight months of 2014, sales of Dacia cars in France grew 18.9%, Italy 46.4%, Germany 7.7% and the UK by 69.7%, the company says, with new markets opening in Malta, Cyprus and across Scandinavia last year.
Dacia’s success has been propelled by its enhanced reliability and its ability to compete in the low-cost sector. Its Sandero model sells for just under £6,000 in the UK.
Renault’s initial goal was to develop a budget car retailing for about €5,000 to sell in developing markets. “Originally the idea was to use the platform to deliver to the Romanian domestic market and central and eastern Europe,” says Nicolas Maure, the French chief executive.
Renault invested €2.2bn in updating Dacia’s facilities and product line.
Since 2004, Dacia has introduced seven more vehicles on to the market, including the Sandero, Sandero Stepway and Duster.
“The Dacia Duster is the number one selling car for Renault worldwide,” says Maure. “And (the factory in Romania) is the biggest vehicle plant for Renault in terms of output.”
But workers may find their wage negotiations may force them out of work. Mr Maure says blue-collar wages have increased threefold in seven years and workers are now being paid “twice as much as the average” in Romania.
Management has suggested recently that if wages cannot be kept down for the plant to remain competitive, Dacia could move more of its operations to its factory in Morocco which it set up in 2012 to meet increasing demand.
Last year Dacia’s turnover was €4.48bn, nearly 3% of Romania’s GDP and 8% of the country’s exports.
