has ambitious plans to enter India with its recently unveiled Logan. This
low-cost saloon, which could be built by Mahindra, has the potential to
storm the lower mid-size car market. We take the wraps off the biggest
secret in the car industry.
has revealed its budget-brand Dacia Logan, a four-door, five-seater saloon,
costing an amazingly low Euro 5,000 (Rs 2.75 lakh) in Romania, its home
market. The Logan has been developed specifically for emerging markets where
it could be sold under the Renault brand itself.
Logan project (code: X90) is a key part of Renault's highly ambitious expansion
plan. Renault chairman and CEO, Louis Schweitzer is targeting four million
sales across the group — which includes Dacia and Korean manufacturer
Samsung — by 2010. It excludes Nissan in which Renault owns a 44 per
cent stake. Schweitzer believes this goal is only possible with vigorous
expansion in new and emerging markets, which account for 80 per cent of
the growth in the car business. Like most global players, Renault realised
that the world's three biggest (and lucrative) markets of the United States,
western Europe and Japan
have become saturated with no potential for growth.
To fuel its expansion, Renault has officially stated that it plans to build
new factories in Iran (which will manufacture 300,000 Logans annually),
Russia, Morocco, China and Colombia. Combined output will reach "at
least" 700,000 by 2010, Schweitzer claimed, accounting for a fifth
of the company's global sales. Such vast volumes are critical as they offer
the economies of scale to permit the Logan's mouthwatering price. Also crucial
in keeping costs down is Renault's decision to develop the Logan in low-cost
Romania. Renault acquired Romanian automaker Dacia in 1999 where labour
costs are rockbottom. Renault refurbished Dacia's Pitesti plant again at
a fraction of what it would cost to set up a greenfield facility.
The Logan, though built by Dacia in Romania, is a 100 per cent Renault product.
It will be sold under the Renault brand in some markets depending on what
circumstances the brand has been established there.
Though Renault has not officially announced the Logan programme for India,
company officials have hinted that India could be a future market. Georges
Douin, Renault's executive vice-president —Strategic Product Planning
& International Operations, said: "There are two more countries
under consideration. One is Brazil, where we are discussing the new line-up
of the local manufacturing plant, and the other is India but no decision
is expected before 2006."
Long-time readers of Autocar India may recall the news story in the October
2000 issue where we actually outlined Renault's plans for this very same
Euro 5,000 car with India as a possible market.
Renault has been thinking of entering the Indian market for many years (see
panel) but the truth is it never had a product that would have worked in
this market. With the Logan, it now does.
To make the Logan in India won't be easy. To meet its aggressive price target,
the car will have to be made with at least 80 per cent local content and
that means setting up a full-fledged manufacturing facility. For Renault
to set up shop on a huge scale in a market it has no experience with is
a risky proposition. So the best option was to find a suitable partner in
Renault talked to Tata Motors for a possible collaboration on the X90 project.
Tata were looking at outsourcing
Renault engines for the Safari and Indica at the time, so a dialogue had
developed. However, it was quite evident that the Logan would be a direct
rival to the Indigo saloon and hence the idea was dropped. "There was
no mutual benefit in this project as we would be building a car that would
compete with our in-house models," said a Tata Motors source.
Renault has since been scouting around for a partner and seems to have zeroed
in on Mahindra & Mahindra (M&M), a company it is familiar with.
Renault nearly tied up with M&M to make the Renault 19 and at present
supplies petrol engines for the Scorpio. M&M officials have vehemently
denied any plans to make the Logan and have brushed it off as pure speculation.
However, Renault sources hinted at this year's Geneva show that they were
in talks with a "utility vehicle" manufacturer in India. But it
was Schweitzer himself who dropped the biggest hint, a few months ago, when
he supposedly mentioned to the Indian commerce ministry officials at a trade
summit that Renault was interested in making cars with Mahindra!
The X90 concept of making a car for emerging markets is nothing new. Fiat
did this with its 'world car', our very own Palio, and Toyota has become
a master at making very successful regional models. But no company as yet
has attempted to make a car with such an ambitious cost target, which is
what makes it unique.
Renault started with a clean sheet of paper for the chassis, but a number
of components that made up the car came from existing parts bins, the logic
being that they were tried, tested and the investment required to design,
engineer and test them was zero. Smart.
The design of the Logan has been dictated by several unusual but clever
compromises. Few curved surfaces have been used in an effort to keep costs
down, laser welding has been avoided, and the designers have paid attention
to allow for partially unpainted bumpers without sacrificing overall chic.
It is exactly the same length as the Hyundai Accent, is wider and built
on an extremely long wheelbase of 2.6 metres. The overall look tends towards
modern 'edginess', with clean bold strokes clearly visible in the areas
of the nose, 'C'-pillar and especially the boot. Renault may have kept body
contours to a minimum for a practical reason, but the designers have turned
that to their advantage. The nose is dominated by a large wide interpretation
of the Dacia grille, a wide grin similar to that seen on the Indigo. Or
is it just Renault grinning? Unlike many cars today, the Logan has a complex
nose that consists of a number of stylistic elements. The sculpted bonnet,
which has a central ridge,
seems to flow down around the grille and the unpainted bumpers look quite
attractive due to a body-coloured chin. The design also features strong
wheel arches, vertical rear tail-lights, and a kink in the C-pillar. Other
cost- saving measures include an absence of a rear quarter-glass, identical
left and right mirrors and a curved rear windscreen that allows the sheet
metal to be kept straighter. A high-mounted boot liberates space for cargo
— a massive 510 litres.
Under the skin, the Logan gets a number of its parts from other Renault
cars like the MacPherson front suspension which is similar to the Renault
Clio, but like the Ford Ikon, there is no anti-roll bar.
Suspension at the rear is via an H-Type torsion beam, a non-independent
setup design that's better suited to overloading and bad roads than pure
handling. The Logan rides high on tall springs and has 155mm of ground clearance,
which can be further jacked up for the Indian market.
The basic structure and parts of the Logan comes from two sources, the Renault/Nissan
Alliance's B platform and the current Clio. Based mostly on the Alliance
B platform that is also shared by the recently launched Modus city car,
the new Nissan Micra, and the upcoming all-new Clio expected end-2005, the
Logan is built on a stiff, modern chassis that has its entire lifecycle
ahead of it.
The B platform also helps keep costs down especially since it shares common
tooling and manufacturing with other models.
come from the Clio and Twingo and the engine compartment layout is identical
too. This makes it easy to borrow all kinds of parts, be it the steering
system, rear brakes, door handles, steering wheel, steering column stalks
and the all-expensive instrument panel from the Clio. Some of the parts
like the gear knob and air vents, however, come from Renault's famous MPV,
Not as 'cab-forward' as the Indigo or the new City, the Logan however has
a great amount of space under its skin. The insides are refreshingly wide
and legroom, due to the long wheelbase, is impressive too. As per its design
brief, the interiors are basic but well built, dominated by large circular
vents and plain rectangular surfaces. The semi-circular instrument panel
with two chrome-ringed dials look quite unique.
The Logan comes with driver and passenger side airbags as well as a couple
of compartments next to the gearstick, one of which can be used as a cup-holder.
Storage areas, however, are not plentiful, and the door pockets small. The
design of the doorpads is also very basic, like those seen on the original
and current base-level Ford Ikon. We feel that for India, Renault will have
to considerably spruce up the interiors of the Logan to give it the required
luxury feel. The wide rear seat, however, is likely to be a strong point
of the Logan as are the rear air vents.
The Logan comes with a choice of two petrol motors, with a diesel version
ready by 2005. Both the 1.4 and 1.6-litre petrol units come from what Renault
calls its K Series, with the engines making a maximum of 75bhp and 90bhp
respectively. These eight-valve engines are simple, rugged units that have
been used extensively by Renault in several products, and are still in use
in basic products like the Kangoo and the Clio Saloon. Both engines use
short gearing in the first three gears, to improve driveability in urban
conditions, but taller ratios are used for improved fuel efficiency in fourth
and fifth gears. The engines employ low-cost shoe-type rocker arms and have
been tuned for low-end torque. The 1.5 common rail diesel puts out a modest
65bhp but is expected to be incredibly fuel efficient.
car Renault has outlined and engineered is a simple-to- build, simple-to-maintain
vehicle perfectly suited to our roads and fuel conditions. Renault has detailed
a labour-intensive approach for assembly that requires low automation, perfect
in the Indian context.
Renault's new Nissan-based production system brings together parts suppliers,
logistic experts, engineers and the assembler to focus on common targets.
This should go a long way in reducing any quality question marks when the
project comes to India.
Though there is no official indication on the Logan's launch dates in India,
we estimate it to be in showrooms by late 2006. It will take at least two
years to tool up and localise the car and before that it has to tie up with
a partner in India.
The X90 project will spawn variants like a hatchback, estate and possibly
an MPV. This will give consumers an entire range to choose from, with prices
starting from an estimated Rs 4 lakh! Renault's entry into India could catapult
it immediately into the big league as the potential for the low-cost Logan
and its variants in this country is simply phenomenal.
(With inputs from Richard Bremner and Pal Negyesi)
Renault has been eyeing the Indian market for several years. It nearly
tied up with M&M in 1994 to make the Renault 19 but the joint-venture
fell through when M&M partnered with Ford. Renault explored making
heavy trucks with Eicher and even talked to M&M again but there was
no deal with either. Renault, however, has supplied engines to various
carmakers in the country, starting with the Bangalore-based San Motors
which uses Renault's 1149cc D7F engine in its two-seater Storm. Renault
also supplies the 2.0-litre F4R engine for the petrol Scorpio. If Renault
ties up with M&M, it will complete a full circle.
Dacia is a Romanian marque, established in 1966 with government assistance
to make Renaults under license. It started assembling the rear-engined
Renault 8 and eventually developed its own car, the Nova which became
the SuperNova with a Renault Clio engine. In 1999, Renault bought a 51
per cent stake in Dacia for US$ 50 million (Rs 240 crore).
Renault has gradually increased its shareholding and now owns 99.3 per
cent, following a compulsory buy-out in February 2003.
As part of the deal, Renault acquired a production site that that was
technically obsolete and had to be refurbished and brought up to international
standards. Renault has invested ¤ 489 million (Rs 2,300 crore)
to create a modern plant capable of producing 200,000 cars a year. In
2003, Dacia sold 69,000 cars.
Logan at Euro 5,000 could be the cheapest midsize car in the world.’