Denis Le Vot, a longtime Renault-Nissan-Mitsubishi alliance executive, was tapped in 2020 by Renault Group CEO Luca de Meo to lead the automaker’s newly combined Dacia-Lada business unit. De Meo has charged Le Vot with expanding Dacia’s model range from small cars to the more profitable compact segments, starting with the new Jogger seven-seat family car, and continuing with the Bigster compact SUV -- all while keeping Dacia’s famously low base prices. He spoke with Automotive News Europe News Editor Peter Sigal at Renault’s headquarters outside of Paris.
Editor’s note: This interview was conducted just after Russia’s invasion of Ukraine in late February, but before the group suspended activities in Russia, where Ladas are built and mostly sold, on March 23.
The Dacia Jogger, available with seven seats, has been getting great reviews from the automotive press. Where are your expectations for it as a new addition to your lineup?
The truth is, I don't know. Our quest right now is to enter the C [compact] segment. So far, the Dacia brand has been kind of compressed in the Renault Group as having the role of the B [small] segment, and we are already the best-selling retail brand in Europe, just playing in the B segment. But the C segment is also big. The TIV [total industry volume] is about 1.5 million.
The Jogger’s starting price is about 15,000 euros, which is very different from other seven seaters in the segment. So, I think there is a great potential for the car. With the Jogger, we are addressing families. We have a history there -- many people have [discontinued Dacia] Dokkers and Lodgys. So, there is potential for repeat buyers but at the same time, the Jogger offers something new, and we want to capture that. With new emissions and pollution regulations coming, family-size passenger vans are very bad in terms of CO2, and seven-seat crossovers are going to be heavy vehicles as full-hybrids or plug-in hybrids, and prices will keep going up. That is why the Jogger, with a starting price of 15,000 euros, is already very different from the competition.
One of the main challenges for the auto industry in the last year has been the shortage of semiconductors. Will you be able to meet demand for the Jogger?
Dacia probably had a loss of about 100,000 cars last year from the shortage. But at the same time, our order portfolio has grown by the same amount. We had 37,000 orders on Jan. 1, 2021, and on Jan. 1, 2022, it was more than 130,000. So we could say that everything that we estimate we have lost, actually we haven't lost. We just have clients waiting, although we are not happy about that. On top of the shortage, we see that cars are getting more expensive, with the prices of raw materials going up, and the more that happens, the more people come to Dacia.
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What is Dacia’s average delivery time now?
We still estimate that the first half of 2022 will be difficult and that potentially the second half will begin to improve, which is to say that suppliers will increase their production capacity. On delivery times, we are now between three to four months, depending on the car. Our job now is to make it shorter, because even four months is very long.
With new car prices rising and supplies tight, used car prices are also going up sharply. Does that benefit Dacia, as the lowest new-car entry point?
Yes. But it’s important to remember that Dacia exists together with Renault. What we are doing is re-engineering the base product from Renault. For instance, our new platform, CMF-B, originated from the platform the group is using on the Renault Clio and Captur, but it took us two years to make it as a design to cost. Then we were able to launch the new Sandero as a B segment car that starts below 10,000 euros. It’s been a hit because we designed to cost using the assets of the group.
So, when car prices are increasing, it's a big strength for Renault Group that we are on both sides of the market, with Renault on the higher end and Dacia on the lower end. We see more and more people rationalizing the way they purchase cars. They don’t want to spend 21,000 euros for a car that they could have bought four years ago for 17,000. We offer trade-offs, for instance in-vehicle infotainment without a screen, just a place to put your phone. It’s not a bad thing -- you are not buying just another screen, it’s quite clever and you can be proud of it. Lots of people see this as potentially being a new way of consuming.
But most Dacia buyers choose higher trim levels. Isn’t that a bit of a contradiction?
Fifteen years ago, we were selling 99 percent of our Logans and Sanderos at the lowest trim level. Today, 75 percent of Sandero buyers take the Stepway, which is better equipped than the regular Sandero and is a little more crossover-ish with higher clearance. The base Sandero is under 10,000 euros in France, while the Stepway is about 13,000 euros, so 30 percent more. What we see is that the more the inflation is increasing prices, the more people come to us as conquests, from other brands and other segments. Think about GSR2 [safety regulation] or Euro 7. This trend toward higher prices isn’t going to stop. It is going to accelerate.
How do you get people to buy higher trim levels and more options? Is it a push from dealers, or a pull from buyers?
Dacia is also different in the way we sell cars. First, we simplified our range, and in the last year we have been simplifying the offerings for each product. Two examples: The Spring [EV minicar] has 10 colors and two trim levels, so just 20 possible combinations. You go online and decide which one you want. Even the Jogger has only 250-something combinations. And we have an offer called Up and Go, in which we choose the most popular version of a model and then we try to concentrate volume on that version. So, there is a maximum amount of this exact trim in the system. The percentage of sales of Up and Go is very high, not only because buyers like it, but also because you can receive the car three to four weeks less time than the average.
Do you ever hear from longtime owners who say they would love to be able to buy a much more upscale Dacia, just because they like the brand so much?
This is what we are doing by going to the C segment. When we created the Renaulution plan with [CEO] Luca de Meo, we asked, What is the potential of Dacia? Where do we go with the brand? And we had various options. One of them could have been geography: Let's go to Australia. Let's go to Latin America. Our technical assets allowed us to create a very competitive B segment car, so we said, If we can do this on the B segment, what’s the limit? We are going to the C segment following the same pattern, changing the platform and then making the essential choices. On the CMF-B platform, we are preparing the next-generation Duster and then what we are so far calling the Bigster [compact-size SUV].
If you look at C segment crossovers, the average transaction price is about 33,000 euros. And when you go to Euro 7, it will be much more because of emissions controls. Then you will have hybrids or plug-in hybrids. More technology and more weight. So, this is where we arrive with our Bigster, which will be the same recipe as the Jogger -- lightweight, great design, offering only the essentials. It’s potentially going to be a very aggressive alternative to the competition.
The Duster may be Dacia’s most important model, as a small SUV that remains a top seller in a high-margin segment even 10 years after it was introduced. How do you see the next generation developing?
Comparing the old Sandero to the new one, on the CMF-B platform, you can see a huge change -- in ride and handling, in modernity, in size, in NVH [noise, vibration and harshness]. We will transfer this platform in the crossover to make the [new] Duster, and it will have the same effect. We intend to make a much better Duster than we have now in terms of comfort and features and handling. The length will be about the same, 4.35 meters. It will make a big jump in platform and also styling. But the Duster will remain a true crossover or SUV -- rough, tough and unbreakable, if you will, because we will still have professional users or buyers who need it for rough roads. The idea is that the Bigster will be more of a cruiser, more of a family car, while the Duster will retain its rugged character and its 4x4 option.
Why do you think the Spring electric minicar, developed for China, has been successful in Europe?
Our cars have something in common, which is weight efficiency. It goes back to the original Logan, because making it light would mean less material, less cost and less consumption. Today, this has an even bigger impact in terms of CO2. The Spring is 970 kg, so it moves reasonably well with a small, 27.5-kilowatt-hour battery. That keeps the cost down. And we have found that people who use a car to commute every morning in Europe -- and there are 15 million of them -- drive 25 km a day on average. Of the Springs today on the road, they are being used an average of 31 km a day, and they almost never go over 50 kph. So, the spec of the car that we are giving has 300 km of range in city use. For commuters, this is a dream. This is exactly what people need.
The Spring, with incentives, is well below 15,000 euros in most European countries. What does this say about the viability of small, inexpensive EVs when most electric cars now are heavy and expensive?
It’s getting even more physically and economically difficult to put a combustion engine on a A [minicar] platform, so automakers are quitting the A segment and going right to the B segment. But you still have 15 million commuters looking for a solution.
Could a car like the Spring be built in Europe?
For the Spring, the history of the car is important, because the CMF-A platform originated in India, with the Kwid. And then we electrified it in China. So, you don't move a car like that, right? Because the car is not just the car, it's also the factory and hundreds of suppliers and parts and tooling. Today we ship the car here from China. But in the future, who knows? First, let's learn about this market and about the car.
Electrification, at least in Europe, is inevitable. How will Dacia become a low- and then zero-emission brand?
Renault is, of course, the front-runner for electric vehicles in the group. Dacia today is playing with weight -- the Jogger, at 1.2 metric tons and with a 1.0-liter LPG engine, has emissions of 119 grams per kilometer of CO2. Today, our "hybrid" is the LPG engine, and it's a really smart solution, but it's not going to last 20 years, for sure. We will use the assets of the company one by one when the time comes. We will have a full-hybrid at some point, using Renault’s E-Tech system, probably by 2023. At that point, Renault Group will have sold maybe half a million of them, so it will be fully amortized. You will say, this is the cheapest full-hybrid in the market, but there is no magic. It’s just the cycle of using the group’s assets that will allow us to do that. Full electrification will come naturally from that.
