Renault has launched the Logan in India, and is doubling output in Romania – but strong demand for the car worldwide is causing Renault a headache – where to build RHD Logans for the UK. Mark Bursa reports from Mumbai.
Go deeper with GlobalData
Renault is planning to build further derivatives of its low-cost Logan ‘world car’, including a shorter – and cheaper – hatchback version, said Renault’s executive VP for product & strategic planning and programmes, Patrick Pélata.
But ironically, the success of the Logan means plans to launch it in the UK may be put back because of a shortage of capacity for the strong-selling sedan.
Right-hand drive Logan production has started at Nashik in India, as part of a massive joint venture with Indian automaker Mahindra & Mahindra. This will see 50,000 Logan sedans and MCV wagons produced a year in the first phase of the cooperation, which will expand from 2009 when a second Indian plant, at Chennai, comes on line. Renault is investing EUR700m in India by 2014 in this venture, which will build up to 500,000 Renault, Nissan and Mahindra vehicles a year.
“This will build two or more Logan derivatives – but not the sedan,” Pélata said. Demand for the car in India is likely to be strong, and this means RHD production for the UK is unlikely to come from India. Pélata said he was “studying the business case” for a UK launch – and he believes UK supplies are likely to come from Dacia in Romania, if there is sufficient capacity at the Pitesti plant.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataRenault is currently expanding the Dacia plant’s output to 350,000 units a year by the end of 2008 – but this volume may already be spoken for, Pélata maintained. The technical challenge of producing RHD Logans in Romania was no longer an issue following the development of the Indian RHD version, and in any case, Pélata said specification differences between Romanian and Indian-made cars – such as better corrosion protection on the European cars – meant Romania would be a better source point for the UK.
The earliest likely launch date is 2009, providing the capacity is available. And the UK launch will follow the successful launch of the car in other western European markets, using the Dacia brand. Pélata said he wanted as much separation as possible from Renault, as the Logan is pitched as a value model. “We have found that a significant number of customers in western Europe don’t want a sophisticated car – they want something simple, reliable and trustworthy.” The Dacia brand is based around low prices but no discounting.
UK distribution would be through Renault UK, and most of the dealer network would be drawn from existing Renault dealers. But Pélata wants to see separate showrooms wherever possible for the Dacia brand – ideally from Day One. “In Europe we’ve tried to develop the network in a pragmatic way, with as much separation from Renault as much as possible, though we accept this is not always possible.”
In return for their investment, dealers will receive a growing range of Dacia models – a total of six Logan derivatives are planned, including the sedan, MCV wagon and panel van versions already shown. Yet to come are a pick-up, a standard-wheelbase hatchback and the shortened hatchback. The short-hatch Logan derivative would be very competitive in India, where it would challenge popular models such as the Tata Indica. But it would also be sold elsewhere: “The need exists for this kind of vehicle in other places too,” said Pélata.
Further down the line, further emerging markets vehicles are being planned. “We have plans to do something even cheaper than Logan – but these are still only plans,” Pelata said. Another possibility would be a larger sedan – a spiritual heir to the old Renault 12, which Dacia produced from the early 1970s until 2004.
Mark Bursa
See also: INDIA: Mahindra-Renault JV opens RHD Logan order book
