Dacia CEO: Sales of new cars are falling because they're too expensive

Dacia CEO Katrin Adt has called on European law makers to relax regulation on small cars to reduce prices and restore the region’s automotive industry to growth.

Speaking to Autocar at the unveiling of the new Dacia Spring recently, Adt said rising car prices were driving a significant contraction of Europe’s automotive industry and cited increasingly stringent emissions and safety regulation as among the main causes.

"The world needs Dacia more than ever, and it's more difficult than ever to be Dacia,” Adt remarked.

"The European market has lost three million cars since 2019. It has never come back to pre-Covid levels," she said, equating the decline to losing the entire German market, Europe's biggest.

"And if you say it's three million cars, then do the math: it's 10 factories, 12 million tyres, maybe 15 million seats, nine million wipers..."

"This is a little bit scary when you think about economics in Europe, and if you analyse why this happened – because it didn't happen in any other region of the world – it is because cars are getting too expensive. And if you're digging down on why our cars are getting so expensive, the main reason is the regulation. This still remains an issue."

Manufacturers must adhere to an increasing amount of emissions and safety regulations in Europe, and 25% of Dacia's R&D budget and engineering workforce is currently dedicated to meeting the various rules.

"We have fulfilled around 100 regulations so far, and we still have another 107 regulations to fulfil by the end of the decade," Adt said.

"The question is: 'Is that exactly what the customer needs and wants?' The most used button in our cars is the so-called magic button, where you can turn off all the [ADAS] beeps.

"So we have asked the [European] Commission, together with other manufacturers, to have at least a regulation freeze on small cars to get a chance to offer affordable mobility."

Fabrice Cambolive, CEO of Dacia parent brand Renault, recently said its engineers were "dealing with a tsunami of regulations from Europe" and called for a regulation freeze for 10 years.

"Then we can focus on affordability, we can focus on electrification," he said. "This for sure will help the European market to reboot."

Adt previously suggested that looser regulation on small cars could be key to Dacia putting the Hipster microcar into production, but when asked for an update on that programme, she would only tell Autocar to "stay tuned".