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Sunday, May 6, 2007

The 'FRUGAL' Logan

One of Carlos Ghosn’s favourite words is “frugal”. As boss of Renault-Nissan, a Franco-Japanese carmaking alliance, he likes to talk of “frugal management”. Now, as his firm rolls out the Logan, its “world car”, in developing countries across the globe, Mr Ghosn has found a whole nation to help champion his cause. “India’s not just a market—it’s where we learn to be frugal,” he says.

Renault-Nissan is learning from Mahindra & Mahindra, an Indian conglomerate with interests from tractor-making to financial services. Mahindra Renault, a joint venture formed in 2005, launched a new version of the Logan in India this month with a price tag of $7,100 before tax. The development of the new model cost 15% less than expected and was completed a month ahead of schedule. Compared with the original Logan, which Renault designed in Romania after acquiring the former Dacia factory near Bucharest, the new version has better styling, beefed up suspension to cope with India’s poor roads and improved air-conditioning.

Since 2004 over 450,000 Logans have been sold in 51 countries. The car is variously sold under the Renault, Nissan and Dacia brands. The initial sales target of 50,000 cars a year in India sounds modest, but Renault has big plans for India, where manufacturing costs are 10% lower than in Romania, says Mr Pélata. Sales of new cars are growing by 10% a year and are expected to reach two million by 2010. Renault Mahindra is investing $950 million in a new factory in Chennai that will be capable of making 350,000 vehicles a year and will build six Logan models, including an estate and a hatchback. The new Indian-developed version of the car will also be introduced into several other countries, including Argentina, Brazil and Mexico. But perhaps the most unusual new market for the car is Iran, where it went on sale last month.

Renault even hopes to export cars to other countries in the region, subject to UN sanctions. Designed, built and sold in the developing world, the Logan is shaping up to be the VW Beetle of the 21st century.
Courtesy :- The Financial Express

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