Car price war kicks off as new firm hits the market
A MOTORING price war was sparked here yesterday when a new manufacturer hit the Irish market.
Romanian marque Dacia, owned by Renault, fired the first shots by announcing prices to undercut one of the most popular cars in Ireland by up to 35pc -- or nearly €8,000.
And it promised to do the same with several more over the coming 18 months as new models arrive and its network expands.
Prime target for the low-price marque's 1.5-litre diesel (€225 road tax) Duster model is the hugely successful family crossover Nissan Qashqai. But others in its sights include the Skoda Yeti, Ford Kuga and Hyundai ix35.
Dacia says the entry-level Qashqai model it is targeting starts at around €22,745 but announced its Duster will cost €14,990. Both prices exclude delivery and related charges (which Dacia is capping at €600). Significantly, it also expects those who normally buy second-hand to be tempted by the three-year warranty of a new car.
Yesterday's announcement heralded the beginning of an assault on the market at a time of serious concerns for dealerships and jobs as new car sales slump.
There is no doubt the prospect of a low-cost seller will spark fears of other brands losing vital sales in a shrinking price-sensitive market.
The new entrant is hoping price and a decent, if unspectacular, level of equipment (four airbags, Bluetooth, 3-star NCAP ratings) will appeal to budget buyers in tough times. It is effectively cutting its cloth according to anticipated demands.
It is aiming to be in the top 10 sellers here by 2015. Several more cars and vans are being lined up for the Irish market.
Dacia cars will be sold in Renault dealerships but will have separate sales people.
Its executives made it clear yesterday they intend to "shake up" the market substantially and expect word of mouth about low pricing to play a significant part.
Founded in 1968 in Romania, Dacia was bought by Renault in 1999 and the brand effectively re-launched in 2004. It sold 350,000 vehicles last year.
Right-hand-drive models for the Irish market will start arriving later in the year in time for sales in January.
While price is hugely important, equipment and reliability are essential elements for consumer confidence in buying a new brand. No doubt aware of this, Dacia says the three-year manufacturer's warranty can be augmented by two years for €549.
And while price will tempt buyers to look, getting them to switch from tried-and-trusted names and models, such as the Qashqai, will be a big challenge.
By the same token, though, the advent of a low-price manufacturer will give consumers not just greater choice but more leverage when bargaining with the established marques.