The £5,000 Logan was only intended for Romania but Renault was stunned when it was a French and German hit. Renault now has plans for Romanian Dacia to turn into a world-beater. The company stumbled on a new market of drivers who rarely bought a new car. There are no frills, but they do come with airbags and ABS. The key to the lower costs is simply lower wages. Staff are paid one-eighth of the salary of French Renault workers.
Buoyed by their success, three more new models are now being planned under high secrecy at the Romanian plant. Toyota are also said to be carrying out a detailed study into the potential of the budget car market. But looming in the distance are the motor manufacturers of China and India – they are gearing up for a big push into North America and Europe.
Now with all the essentials and safety features we’ve come to expect but priced at $2,500, the Indian Tata Nano will forever change the economics of cars. Given the current price crash on forecourts across the UK, how low can new car prices go before the allure of traditional European car brands start to fade?