Logan: Renault's Low Cost 'World Car'

            
 
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : BSTR261 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

New Product Development
Case Length : 21 Pages
Period : 1999-2007
Pub Date : 2007
Teaching Note : Not Available
Organization : Renault SA, S.C. Automobile Dacia SA
Industry : Automobile
Countries : Global

Abstract:

The Logan was a low cost car developed by French auto company Renault SA. The car, which Renault intended to be its 'world car', was developed at the company's Romanian subsidiary, Dacia. Though originally meant to be sold in markets in the developing parts of the world, the Logan found unexpected success even in countries like France, Spain and Germany, leading Renault to introduce a version of the car for these markets as well. This case discusses the factors that prompted Renault to make a low cost car. It then examines the approach that Renault took towards developing a world car with a pre-designated sale price, and the various ways in which costs were kept low during the production process.

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It also discusses the launch of the Logan and the subsequent events, which resulted in Renault developing a new version of the car for Western Europe. The case concludes with an analysis of Logan's prospects, with special reference to potential competition.

Issues:

  To examine the strategic reasons behind a major auto company's decision to manufacture a low cost car for developing markets.

  To analyze the reasons behind the success of a low cost car, not only in its target market, but also in the markets it was not intended for.

  To study the strategy employed by the company in entering new markets.

  To study the challenges companies face in developing products for emerging markets.

  To study the prospects of the low cost car, and to analyze the possible impact of competition in future.

Contents:

  Page No.
Logan's Indian Launch 1
Background 2
Project X90 5
The Making of the Logan 6
Keeping Costs Low 6
Safety 8
Logan's Specifications 9
The Launch and its Aftermath 9
The Prospects 11
Exhibits 13

Keywords:

Logan, Renault SA, Automobile Dacia SA, World Car, Project X90, Low cost manufacturing, Central and Eastern Europe, Emerging Markets, Design-to-cost approach, EuroNCAP, Volkswagen, Toyota, Automobile safety, Market saturation, Mahindra & Mahindra.

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