What has delayed the Chinese ‘invasion’?

Posted on March 14th, 2013 by Rob Marshall

Yugos, Ladas and Moskvitchs used to cater for the very bottom end of the new car scene. Generally, these machines were inferior to Western products in virtually every way, apart from their price. The real expense came at trade-in time, when the owner discovered the one-time ‘bargain’ was almost worthless.

Those brands have now disappeared from the UK. Just as many carmakers, including Ford, Fiat, Citroen, Volkswagen and Renault have developed their vehicles to provide anything but basic and cheap motoring and most of the surviving makes that upheld 1980s no-frills transport (such as Skoda, Seat, Hyundai and Kia) have hiked both quality and price upwards, the bottom end of the market is now presented with an opportunity. With good condition used examples being in high demand, the best of which are making strong money, low cost new cars have never been more relevant.

Although DFSK, Great Wall and MG Cars are sold here, their influence on 2012’s total UK market share was minimal, meaning that the Chinese ‘invasion’ of cheap new vehicles has not materialised as yet. One reason might be the arrival of Dacia (pronounced these days, as the television adverts hint at repeatedly, ‘dat-cher’), a Romanian brand that started churning out defunct Renault models for its own market in the mid-1960s. Since the French concern took it over completely in the late 1990s, Dacias have been endowed with their own styling stance, even though they are still powered by French engines of yore.

On a recent test-drive event, Renault UK admitted to me that most Dacia buyers do not buy the base model (£5,995), which lacks a radio, wheel trims or even a colour (available only in white, with black plastic bumpers). The fact that it is powered by a 1.2-litre Renault engine of ancient (but rugged) lineage did little to whet my appetite, as did the doors that ‘clanged’ shut and the proliferation of hard and unyielding plastic trim throughout the cabin. Yet, British customers are welcoming the influx of Romanian immigrants, as they are lured into the showroom by the heavily advertised low price, prior to spending at least half as much again on a better specified example, which must be how Dacia turns a profit.

With this in mind, a colleague and I joined forces to pitch a top-of-the-range Sandero ‘Lauréate’ (£9,940), equipped with cruise control, a speed limiter and Renault’s latest 898cc turbocharged 88bhp three-cylinder petrol engine, against a new Clio that shares the same motor and a £2,000 premium.

The well-established Renault is not only trimmed more comprehensively and produced from better materials but it is also more cosseting to drive. Yet, unburdened with the extra complication, not only was the Sandero nippier but it also had a marginally higher top speed. Its notchy gear-change was more direct than the Clio’s and its brakes and steering were more communicative, which was a pleasant surprise. The rigid plastic trim failed to rattle on our nearly-new example but a permanently illuminated engine warning lamp gave me some reservations, even though its presence did not appear to affect how the car drove.

Such a refreshing old-school approach to a new car also reaps benefits. The cabin is spacious, the boot is generous and the large windows permit excellent visibility. Yet, there are some drawbacks to the low price. Apart from the low-rent materials, an automatic transmission option is missing from the list and, due mainly to the lack of standardised safety equipment across the whole range, the Sandero possesses a lowly 3-star Euro NCAP rating, which questions the integrity of Renault’s well-established 5-star safety marketing.

CAP, the independent car value expert, reports indicate that Dacia’s residual values are unlikely to follow the downward trends of ex-Soviet cars of several decades ago. Yet a 30-minutes-long sample of a new car model, let alone a new brand, is very different to living with an inexpensive car for several years or more and the motor trade’s perception of Dacia could be very different, once the novelty factor wears off.

daciaFor the moment, Dacia’s cheap and ‘honest’ marketing approach is winning over British buyers, willing to forego refinement, equipment and brand cachet in exchange for the cheapest new car in Britain. Yet, the Sandero is not just a cheap box. It is a characterful, no-frills product that is free from significant vices and performs well enough to match more expensive rivals. That alone poses a threat not only to potential Chinese competitors but it also poses a challenge to some of the more mainstream manufacturers, including, ironically, Renault.