With less than one year to go as Renault’s chief executive, Louis Schweitzer is taking one last gamble by launching a car made specifically for developing countries.
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The Logan is a testimony to Schweitzer’s ability to think big, according to Automotive News Europe. His first coup was the 1999 purchase of a near-bankrupt Nissan, which under Renault’s leadership has been turned around and is now paying huge dividends to its saviour.
But analysts doubt whether the Logan will prove as masterful a stroke.
Logan “is the second big idea of Schweitzer’s presidency, and one full of potential issues,” said Smith Barney analyst John Lawson. “Being a success in all places is a tough call.”
The Logan is the second attempt by a Western manufacturer to win emerging markets’ customers with a tailor-made car. Renault is confident its Logan will do better than the Palio, which Fiat launched in the mid-1990s, and which has been selling at half the intended pace of one million units a year.
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By GlobalDataSchweitzer hopes to sell 700,000 Logans a year, and that’s “conservative”, he said.
Like the Palio, the Logan will be built in many different countries, most often through partnerships with local manufacturers. It’s only in Romania that Renault is building the car on its own, through its fully-owned Dacia unit.
“A lot relies on the local partnership you’re forging and the economic stability of the country where you’re establishing the car,” Lawson said.
Renault plans CKD production of the Logan in Russia, Iran, Morocco, Columbia and China, which all have volatile economies. That could trigger large swings in car demand.
After so many efforts to lift its brand image upscale, with the avant-garde Avantime [a flop, axed less than a year after launch] and Vel Satis luxury cars, the question is whether Renault risks hurting its brand image with the robust, no-nonsense Logan.
But that will be an issue Schweitzer’s successor, current Nissan chief Carlos Ghosn, would have to deal with.
