Friday 9th November 2012

PH Blog: price point

First diesels, now Harris wants a Dacia. Don't worry, we'll be back to V8s next week...

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The new Dacia Duster might just be the most significant new motorcar launched in the past decade. For a UN-spec, two-wheel-drive version on steelies and with some white paint slapped on its panels, Dacia is asking just £8,995.

Sandero significant but not interesting!

Keen What Car? readers among you will point out that the Dacia Sandero can be yours for just £5,995, but the pricing of that car is less impressive because I have no interest in driving one - whereas a few weeks watching French families happily bouncing around in Dusters had the opposite effect.

The French have always had exceptional taste in family wheels - they gave us the mass-market hatchback, the seven-seater estate, the Espace, the Scenic, Until they lost their way in the last decade, they had always defined the zeitgeist: the current needs and requirements of the motorist. With Europe being mostly skint, what we need is honest, rugged engineering, a dash of inverse-snobbery-cool and a list price that wouldn't constitute the optional extras on a lumpy 530d.

The Dacia range and its pricing will have a profound effect on the European motor industry because it questions the fundaments of the car transaction in the year 2012. People are less willing to spend money on cars, and yet cars become ever more complicated and, as a result, expensive.

Duster, meanwhile, has classless cool

Premium brands are surviving, but the middle ground is a bloodbath. It has taken just five years, a recession and a good measure of Korean discipline to permanently change the face of European motoring. Peugeot is staring into the abyss, Fiat has just tacitly admitted it cannot make money from building new cars in Europe and without Nissan and Dacia, Renault would be equally troubled. It makes you wonder how much longer VW will support SEAT.

Disruptive pricing strategies make a fine spectator sport: the Duster will strike fear into many £20K SUV vendors, but this tactic is appearing in other areas of the market too. Take the BMW M135i, a 320hp hatchback which is offered in a basic level of trim and available for under £30K. Many people on PH make the observation that the car can easily be specced to £38K, but that misses the point - this is BMW offering to sell you a basic car at a price point which, just like the Dacia Duster, completely undermines rival vehicles.

It's a potentially exciting precedent, and one that revisits the market conditions of the 70s, 80s and early 90s: namely that you could just about afford a prestige brand, but only if you ordered it with one seat, a single rear-view-mirror and an engine with around 90hp. Only now you get the fast motor, but are forced to spend if you want connectivity and lashings of dead cow.

Elsewhere the M135i is shaking things up

This might just be the replacement for niche marketing. Ever since Renault produced the Scenic, carmakers have been obsessed with creating space for themselves by contorting conventional market segments. But there is only so much you can do with a tin box and four wheels, so this kind of disruptive pricing activity looks like an interesting new direction. Potentially risky, but also potentially rewarding.

It's happened before - remember when Daewoo arrived in the early 90s and started flogging tarted-up Cavaliers and Astras? For a time it worked. Around the same time Chrysler gave us the Cherokee 4.0L, which looked like such a bargain next to its rivals people hoovered them up - until they realised they were a bit crap.

In an industry already fracturing under poor margins and zero profitability, it seems unlikely that carmakers can afford to sell cars for less money, but if they can restructure themselves to lower the cost base, then we might just see more brands smashing their way into new segments, just like Dacia is doing right now.

How does this affect the average PHer?

Well, if you're like me, you probably avoid buying new cars because the initial depreciation is so harsh - so you pride yourself in finding real value through older metal. Now if I was looking for an £8K-£10K machine that could handle a harsh winter and could potentially be quite fun to own, I'd struggle to find anything that would match a Duster. Used Freelanders and CRVs just don't appeal, and they wouldn't have the warranty. A Discovery at this price is a ticking-bomb and nothing emanating from Korea remotely interests me.

So what Dacia is doing is not only questioning new car purchases, it is proposing a new car purchase instead of an informed used car purchase. That's classic PH territory.

I'm sure you think I've gone mad, and I won't drive a Duster until a few weeks' time, but it already looks like a great usable tool in the classic French (Romanian) mould: usable, robust and somehow classless.

Chris

 

[rocketride]

I'm with you!
Already been and spoke to Renault but they recon March delivery as there has been overwhelming demand!

I just love cheap, classless, utilitarian, work slags!!! And on the plus side it doesn't look camp as fk like Vitara or Range Rover Vogue.

Its back to basics like the Mk1, Mk2 Foresters which i loved!

Edited by rocketride on Friday 9th November 14:21

[rocketride]

Frimley111R said:

I'm not convinced about the UK though. Badge snobbery is rife here, more so than anywhere else. Consumers are used to getting amazing quality cars now, how many want to buy a basic budget car for what is still a not inconsiderable amount of ££ remain to be seen. The Duster in all the pics is not the one that is selling for £8995. I doubt if anyone with that cash saw a basic Duster would do anything other than run off in the other direction!

Those who haven't got money tend to be badge snobs as there trying to prove they have money usually driving a Porsche, Ferrari, Range Rover and balls deep in dept! People i know who are rich and i mean rich drive round in the sttest cars as a daily driver and dress like they have had there clothes donated to them from a charity shop!

Stealth Wealth is super cool these days as the rich dont want to be confused for dept ridden a-holes!

Edited by rocketride on Friday 9th November 14:38