To make its famous €5,000 car, Renault relied not on magic tricks, but on the help of suppliers and on an uncomplicated approach to holding down costs.


It worked so well that Renault may use what it learned throughout its product line-up.


Engineers based the car on the new B-platform of the Renault-Nissan Alliance; reused parts from the Clio going out of production; and redesigned the body and manufacturing process to take advantage of cheap labour instead of expensive capital.


The X90 program, baptised on 2 June as the Logan, is in pre-production now at Renault’s Pitesti, Romania, plant, and next year it will be assembled in Russia, Morocco and Iran, followed by Columbia in 2006.


It will be sold as a Renault in markets where Renault is not known, and as a Dacia, Renault’s Romanian brand, in other countries.


Ultimately, if a deal in China with Dongfeng can be clinched, Renault expects the car to be made in volumes of 700,000 annually in several silhouettes: the original three-box and a planned station wagon and small van. Others may be added later.


Supplier co-operation was critical to the success of the programme. While some components are sourced from Western Europe, many had to come from Romania and surrounding low-cost countries if the cost goals were to be met.


That meant persuading some suppliers to install new facilities there, based on an anticipated volume of 200,000 units and 150,000 CKD kits a year.


To encourage local installation, Renault offered suppliers three types of support, on a case-by-case basis: strengthening their legal structure and analysing their financial situation; introducing optimised management and work organisation; and offering their expertise in engineering, quality, methods, logistics and purchasing.


In the end, the X90 project has 143 tier 1 suppliers, of which 43 located in Romania, nine in Turkey, where Renault has a factory, and five in other Eastern and Central European countries.


“The majority of our suppliers are the same ones we work with all the time,” said Odile Panciatici, the X90 engineering project manager. “They are our partners on other platforms, like Valeo, Johnson Controls, Faurecia, and they have local production in countries like Turkey, Poland and the Czech Republic.”


Valeo-VECS (Valeo Electronic and Connective Systems) and Valeo Climate Control, Faurecia-Euro APS (a joint venture between Faurecia and ADPlastic et Simolder), Johnson Controls (seating), the Renault subsidiary Automotive Chassis International (chassis parts), Piroux, IRI, MCI Ingénierie, Cortubi and Metal Impex all chose to locate in a supplier park at the Pitesti site.


They are located on the 2.9 million sq. m. Pitesti grounds in their own buildings. Components are delivered just in time and in sequence to the assembly line.


Inergy, which supplies the fuel tank, adapted for the Logan, and Metzeler are close by in Pitesti, and Michelin, Continental and Autoliv have plants elsewhere in Romania.


Two of the most important suppliers to the Logan, says Renault, are in western Europe: Koyo and Faurecia (for steering parts), and two are in Turkey, Trakya and AKA.


Johnson Controls, for example, delivers seats just-in-time and in sequence to the assembly line.


Uses many Clio parts


The Logan is based on the Renault-Nissan Alliance B-platform, but it reuses many expensive parts from the current Clio platform, including engines, transmissions, front axles, steering, instrument panel, door handles, steering gear and rear brakes.


The engine compartment layout is the same as the current Clio, so interfaces and assembly methods are the same. Logan uses the electronic platform of the Clio and Twingo, and the heating system and rear axle from the B-platform.


Among the components developed especially for the Logan were heavy-duty shock absorbers, because the car will be driven on rough roads when heavily loaded, and the fuel tank with integral filler neck and removable external filter for countries using lower grades of fuel.


Although borrowing the B-platform’s architecture saved some development costs, it was modified to save unit costs.


“The conception was adapted to local technology, more multi-part than monopart,” says Panciatici.


Redesigned for local build


The Logan uses traditional steels that can be handled by Dacia’s tooling, not high-strength steels that require more sophisticated equipment or transportation from west Europe. The bodywork was conceived to be made of smaller parts welded together rather than larger stampings.


Front fenders are stamped steel, not large plastic injections as with almost all other Renault vehicles. Body panels and window glass are designed to be simple, without the deep draws and complex surfaces that mark new western European cars.


Some body panels are made of heavier gauge steel to cope with the rugged environments to which the Logan will be subjected.


In the case of protecting the car from gravel damage, said Panciatici, the body was redesigned to avoid the need for heavier grades of steel.


The Logan was not designed to use modules for the cockpits or doors, says Panciatici. “The concept of the module is interesting when you have a lot of diversity,” which is not the case for the Logan.


Renault used its own version of the Alliance New Project Quality Procedure to verify that local sub-suppliers were able to meet Renault standards, said Panciatici.


While not certain of the figure, she says that about 20% of the suppliers who furnished parts to Dacia before Renault bought the company in September 1999 had won Renault quality certification.


Much work on the Logan was completed during the time when the Renault Nissan Purchasing Organisation was still being developed, so decisions had been made under Renault’s existing purchasing department guidelines.


The expansion of the Logan to Russia, Morocco, Iran and Columbia will be supported by CKD kits from Romania.


In Iran, where Renault formed a joint venture with Iran’s state-owned car companies, Iranian content is expected to quickly rise to 50%. Elsewhere, local content will be less.


Is it really a ‘€5,000 car’?


In the end, the €5,000 car doesn’t really exist. Renault will sell the entry level version at that price, in Romania only, beginning next year after it has started selling better equipped versions at up to €8,000.


At €5,000, the car is unlikely to be earning a profit.


In Russia, the price will average around €10,000. Renault will market the Dacia as bigger than cars sold for the same price, or cheaper than cars sold at the same size.


SupplierBusiness.com