University ‘Alexandru Ioan Cuza’, Iasi, Romania, 2006
CASE STUDY DACIA-RENAULT
Students: Ramona Halarescu Olivia Leu
Background The Marketing Strategy 2.1. People 2.2. Product 2.3. Price 2.4. Promotion 2.5. Place Goals and Objectives Conclusion
1. Background In today’s rapidly changing environment products and markets have a limited life expectancy. A company which does not update and change its products and markets is unlikely to be successful for long. This was at the core of Renault’s decision to take over Dacia, a long established car producer in Romania, the heart of Romania's automotive industry. Renault has been present in Romania since 1966 and forged the country's automotive industry. Close ties have existed between Renault and Automobile Dacia for 35 years, with various Renault models being assembled by Dacia, under licence through to 1978, thereafter independently. Excluding the SupeRNova, the vehicles currently produced by Dacia are based on former models of the Renault range. On September 29, 1999, Renault acquired 51% of the capital of the Romanian car maker Dacia, amounting to $50 million. Renault has since increased its equity stake to 92.72% and put the entire company on track for rapid, wide-reaching modernization. Built in 1966, Dacia's Pitesti plant covers some 2.9 million sq. meters. More than 2.2 million vehicles have rolled off the production line since 1968. The plant has an annual production capacity of 120,000 vehicles, plus 120,000 engines and gearboxes, with operators working in two shifts. Fully computerized, Dacia is now hooked up to the Renault-Nissan Alliance networks. To meet demand, the company has developed a monthly programming system that adapts production to demand forecasts. The modernization of production facilities and assembly lines is an ongoing process. The new Logan launching marked the Dacia brand revival. Once this was launched Dacia could run in its industrial commercial tool and define its new identity with vehicles like Solenza, the Diesel engine on the van, etc. 2. The Marketing Strategy 2.1. People At Pitesti, Renault is working with local players to combat unemployment. This partnership paved the way for the founding of the Development and Solidarity Foundation of the Pitesti-Mioveni region in 2001. The objective is to develop employment in the region by promoting business creation, capital investment and vocational training. Dacia's employees (12,000 employees) are the company's most valuable asset. The present focus on customers implies a veritable "cultural" revolution among employees, in management styles and work organization. The number of hierarchical levels has been reduced. A system to recognize individual performance (personalization of compensation) and collective achievement (bonus for quality progress) has been successfully introduced. Cross-functional work groups and basic work teams have been formed. The organization of the workforce into basic work teams has resulted in the development at the level of each unit of the "customer/supplier" principle. Each unit receives parts from its suppliers and delivers them to its customers with value added. Training was given to 1,200 employees in 2000, in Romania as well as in other countries, particularly in France. To complement its proactive training policy, Renault has set up the ‘Automobile Academy’ based in Bucharest. The academy consolidates managerial, commercial and technical training programs for the employees of Dacia, Renault and Nissan Romania.
2.2. Product Romanian car market represents a great case-study for analysts. Today there are in operation several motor vehicle manufacturers, and also a network of suppliers working both for the local assembly lines and for export. The production of motor vehicles over the last years since 1995 is presented in the chart below:
In 2005, the local motor vehicle production went up by a strong almost 60% as...
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