Dacia-Renault: Renault Strategic Cycle

930 Words4 Pages
1.1.1. Renault Figure 3.3. Dacia-Renault timeline Dacia was established with Renault as a Joint Venture in 1966. It is situated near Pitesti, in a small town called Mioveni. The first car came out under the licence of Renault in 1968. Ten years later Renault withdrew from the JV and Dacia continued producing without any western partners. For almost 30 years, Dacia was producing the famous model Dacia 1300 under the so-called licence of R12 and after 1978 the vehicles sill resembled to this model. This vehicle had almost no technical and technological advancements; it was a mass product for a mass market. Until 1981, it was the only car produced by the Romanian producer. The first and at the same time the last model designed only by Dacia…show more content…
In that way, Renault could get access to the growing CEE market. They took over Dacia in 1999 by acquiring 51% of the shares, and in 2004, they already had a 99.3% share of the Romanian firm. The investment and upgrading process could be divided in three main stages. In the first step, taking over the Dacia plant, Renault’s main task was to modernise the product and design process in the subsidiary in Pitesti. Not only did they create technological improvements, but they also invested in training the local…show more content…
(Renault, 2015) Regarding the chosen market entry strategy, it can be clearly seen that in the very beginning no other options, but only a cooperative form (Equity Joint Venture) was possible due to the legal-political barriers. Later, despite the fact that Renault withdraw from the alliance, Dacia was still producing under the licence of Renault. In the second era of this partnership a completely new case occurred, since Renault gained 51% of the shares in 1997. Until 2004, they bought more than 99% of the shares. Overall, this action could be interpreted as a real option where Renault entered an alliance with a possible further development. Moreover, so did they when they took over almost 100% of the shares in the mid-2000s. The MNEs relation with the privatised company was one excellent since all of the stakeholders gained. The government, along with the country’s economy, received a huge FDI and a possible market leader for the auto industry. Renault created workplaces, contributed to the improvements in the infrastructure of the southern part of the country, brought auto piece suppliers, established a long term relationship with Dacia and thus fulfilled not only the need of the government, but also the privatised companies’ objectives. Consequently, a win-win arrangement has

    More about Dacia-Renault: Renault Strategic Cycle

      Open Document