PARIS - Renault has an immediate priority at Dacia following its $50 million (euro 49.5 million) purchase of 51 percent of the state-owned Romanian automaker. Its first effort will be to make the current Dacia 1310 and Nova models safer, less polluting and more reliable.
The Dacia 1310 is based on the old Renault 12, and the Nova on the obsolete Peugeot 309.
According to Manuel Gomez, Renault vice president for international operations, Renault will ensure Dacia's current cars are adapted to meet modern demands of customers and authorities. Gomez was Renault's key negotiator in meetings with the Romanian government. He will be chairman of Dacia.
The current general manager of Dacia in Romania, Constantin Stroie, will keep his job. Two deputy general managers will come from Renault: Christian Esteve will be chief financial officer, and Manuel Roldan will be manufacturing and engineering manager. The board will consist of nine people - seven appointed by Renault.
Longer-term plans for Dacia include building a low-cost car for emerging markets, and the potential construction of the Renault 19 in Romania.
Renault's purchase will be completed by a $219 million investment program over five years to revamp outdated manufacturing facilities in Pitesti, Dacia's plant 100km from Bucharest. Dacia's workforce will be reduced from the current level of 28,800 to 16,000. Fifty percent of the remaining workers will be employed by suppliers formerly controlled by Dacia. Eventually Dacia, in its reorganized form, will employ about 8,000 people.
The purchase of Dacia is a first step in Renault's strategy to create a second brand for emerging markets. It plans to introduce a $6,000 vehicle in late 2003, and hopes to double Dacia's production volume from 106,000 units last year to 200,000 in 2010, including 80,000 exports.
The new car will be sold in all central and eastern European markets (except for Slovenia), and much of Africa and the Middle East.
'This could be the car with which to enter India,' said Gomez.
Gomez said Renault is also studying another low-cost car proposal with Nissan. Dacia has 186 independent dealers and 14 factory dealers in Romania. 'They are in the same bad condition as the factory - so there is a lot of work to do,' says Gomez.