Currently reading: Dacia pledges to reduce prices when production costs dip
Dacia's 'essential' ethos means its cars are cheaper to produce, but material and energy costs still have an impact

Dacia will reduce the prices of its cars when the cost of energy, parts and raw materials used in production also come down, brand head Denis Le Vot promised.

Dacia has become one of the most visible brands for price rises as it pushes through cost increases over the last few months onto customers.

The Dacia Sandero, the brand’s entry-level car in the UK, was launched in 2020 with a start price of £7995, but the loss of the budget Access trim and a series of price rises now means the car starts from £12,595, a hike of 58%.

Le Vot promised that a fall in production costs would be met by list price reductions. “If it happens I will certainly do that,” Le Vot told journalists at the Paris motor show this week. However he expressed doubt that costs would come down soon.

Dacia maintains its budget position because its costs overall are lower than those competing in higher price brackets, he said. “We are cheapest on the block and we will always be because our cars are smaller and lighter with only essential content,” he said. ”The cost pressure we are having on steel and on aluminium is real but we use less than our neighbours.”

Dacia’s price rises are more obvious and happen more often because it doesn’t discount. “Another other brand might increase prices from €10,000 to €10,200, but they also quit rebates [discounts] at the same time,” he said. “We put zero rebate on the car, so we’re super readable.”

The true cost of new car price increases was revealed in What Car? data showing the monthly payment figure for new-car finance had increased by up to six times the national inflation figure, depending on brand and model. Overall personal contract purchase (PCP) finance monthly bills shot up 12.4% on average between September 2021 and September 2022 as manufacturers stripped out discounts.

Car makers have been able to more than cover the rise in energy bills, parts costs and raw materials because supply shortages have dramatically slowed production to the point they can’t satisfy demand. In that situation price rises become inevitable. 

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