Logan: Strategy, development and prospects

The Logan program falls under the international development strategy of the Renault group, whose objective was to produce annually more than 700,000 specimens of this model in the world by 2010. Logan is the first model of ‘Dacia made by Renault’, and the symbol of the revival of the Dacia mark, which will make it possible to conquer new customers by marketing a range of modern vehicles, which are robust, reliable and reasonable in price.

The challenge of Logan was thus to answer these, particularly in terms of cost. Renault thus sought to optimize synergies at all the stages of the chain of value. The Project X-90 (Logan project) has been very successful. It is a car, which is not very expensive and therefore, likely to attract many customers. And that is the case: since its launching in 2004, sales have exploded in Romania – the country of origin of the car - as well as worldwide where the car is marketed.

At the beginning, the cars were produced in Romania, but now the places of manufacture have diversified: Morocco, Colombia, Iran, India, Brazil and Russia. But this success led to avarice and other manufacturers decided to follow this path. Thus FIAT decided to launch a new car at a very low price, the Linea Punto produced in Turkey, but intended for the international market.

This new model should also be manufactured in China, India and Brazil. There is no doubt that others will also launch cars in this category. Renault and Dacia thus started a movement, it remains to be seen if they will have the capacities to remain the leaders in this market.

When Renault was planning to build the Logan in 2000 – 2001, the firm developed a strategy so that the car is suited for consumers, different trends are developing in the market, especially as regards the environment, mode of distribution, technological or safety.

Indeed, many lobbies and governments are gradually becoming aware of the impact of automobiles on the environment (in 2000, they represented one third of CO2 emissions). Serge Lepeltier, Senator Cher prepared a report on the problem of greenhouse gas carbon dioxin. A commitment is made between the government and manufacturers to reduce these emissions which would, by 2008, be less than 162g CO2/km.

Moreover, in 2000, manufacturers agree that, in 2005, Life Vehicles (ELV) is valued at more than 95%. A law was then passed to prohibit the use of certain substances (cadmium, chromium, mercury, lead). To cope with this change in behavior on the part of consumers who want a car more environmentally friendly, manufacturers are going into alternative energy including fuel cells. However, this technology is to develop and present some problems: size, weight, cost, low density of gaseous fuel, choice of source of hydrogen).

Parallel to these developments in environmental consciousness, the automotive industry is facing the possible end of a monopoly on the distribution of cars. Since 1995, Regulation 1475/95 on the block exemption was applied with a target date of September 2002. Carmakers may therefore see some new players in the market for car dealerships. Lobbies of large retailers, among others, hoping that cars will be sold in coming years in a supermarket or even online. Multi-branding is also an idea that found its way into the minds of consumers and governments that seem to envisage a separation of sales and after sales service.

Tags: Renault – Dacia Logan, manufacture of Logan, revival of Dacia mark