The Logan model, considered a 'low-cost' brand, posted a profit margin much higher than all other Renault models in 2007, and generated not only higher sales, but also significant profits, said Carlos Ghosn, the chairman of the French group that owns Romania's biggest carmaker.
"The Logan programme has a 6% operating margin on foreign markets, and in Romania this figure is 8%. We have achieved a 3.3% operating margin for the entire group, above expectations, but Logan posted a much higher profitability. This proves that low-cost cars do not necessarily mean low profit margins," Ghosn stated in Paris yesterday when 2007 financial results were revealed.
The 8% operating margin could place the Romanian carmaker among the most profitable in the world, as this is a value close to carmakers such as Nissan and Porsche, which derive renowned profitability on a global scale. "We need to convince the market that Logan will not just boost its volume, but also its profit. Low-cost cars are not necessarily low-profit cars," Ghosn pointed out.
Automobile Dacia last year manufactured more than 215,000 Logan cars, an increase of 21.6% on 2006, with more than 121,000 units delivered to foreign markets. The representatives of the Renault group did not reveal the Romanian carmaker's financial results, however, according to the estimates based on the growth rate, Automobile Dacia's business could have gone beyond the 2 billion-euro mark in 2007. The company had posted net profit worth 100 million euros in the previous year, alongside turnover worth 1.56 billion euros.
Automobile Dacia will reveal its new logo during next month's Geneva Auto Show, and will also showcase the new model based on the Renault Sandero platform, which is currently assembled in Brazil.
"Dacia has evolved, we now have a complete range of models and it was time to change the brand image," stated Christian Esteve, head of the Euromed region (which includes countries in Eastern Europe and North Africa, such as Romania, Russia, Turkey and Morocco). Esteve was part of the negotiation team at the time when Renault took over Automobile Dacia. In addition, he also served as the plant manager in Mioveni for several years.
At the Geneva Auto Show, Dacia will showcase its second model since being taken over by Renault, built on the Renault Sandero platform.
"The new model from Dacia will exceed the sales of the Logan sedan at some point. It won't be priced higher than the Logan range, because they are based on the same platform," Esteve pointed out.
Romania was the most cost-efficient country of all countries where Renault operates, and left even Turkey behind in this respect, Euromed's director revealed.
"Romania is now the most competitive country in terms of manufacturing costs, even if it uses manual assembly lines instead of industrial robots. In the long run, however, this competitiveness will be difficult to maintain because competition is not fair between EU members and another non-member countries (i.e. Turkey)," Esteve added.
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