The Spring, the firm’s first electric car, is built in China and has a threat of tariffs hanging over it as part of Europe’s plans to slow the flow of low-cost electric cars coming from China, but for now le Vot said there are no plans to move Spring production.
Speaking on the competition from Chinese car makers in general and their ability to potentially undercut Dacia with better equipped models, le Vot said the firm was “not ignorant to the content” of Chinese cars but would not waiver in its approach to counteract them.
“It is important to understand the philosophy of the market and what the market needs,” he said, in relation to Chinese cars being sold in Europe.
“So when you come with wildly overspecced cars, there is a lot of money that you put on the market for nothing,” in terms of all that equipment having a cost.
“This may become a problem when you begin to manufacture the cars locally. You have to leverage where the market stands. It is very hard [to compete], but you just have to be stubborn.”
Le Vot said Dacia would continue to be able to control costs and have low prices by building cars in its own way: set a price at the start for retail, take profit margins out of that, and then “split the rest into pieces, and we give a budget to every part of the car”.
“Only then we start interaction between our engineering, design and suppliers. It may look logical, but it is not the way people do the car usually.
“Usually people design the car that they want. Let’s make it big. Let’s make it wide. Let’s make it round. Let’s make it whatever size of the wheels and the power of the engine. And then they would design the parts from this, and only then would they start to talk to the supplier and try to get the best price they can for each and every part.
“Hence, the cost of the vehicle is, as a result, rather late in the project. That may be a good or bad surprise, and that would influence the positioning of the price of the car or the profitability of the company.”