PARIS –SA pulls the covers off its much-anticipated new world car for emerging markets at its Technocenter research and development center here.
Known as the X90 or the €5,000 ($6,100) car during development, the new model will be called the Logan when it begins to roll out in key markets later this year.
’s new €5,000 car.
Some 500 journalists from the regions where the new car is to be sold, including the Middle East, North Africa and Latin America, were shown the new car with both Dacia and Renault badges.
The Logan initially is to be manufactured at Automobile Dacia SA, a Romanian car plant owned 99.3% by Renault, but will be built elsewhere as well.
Whether the Dacia or Renault badge is used will depend on the characteristics of each market and the position of the Renault brand there.
In Central and Eastern Europe, Turkey, North Africa and the Middle East, Logan will be marketed under the Dacia brand. In Russia, Iran and Latin America, Logan will sport a Renault badge.
But even the Dacia-badged cars will carry the label, “Logan by Renault.”
Renault Chairman and CEO Louis Schweitzer says the adoption of the “design-to-cost” engineering methodology, use of carryover parts to optimize reliability and manufacturing costs and the application of digital design in developing the Logan have made it easier to keep program costs on target.
The Logan is based on the new B-platform, which is used for theMicra and Renault Modus and will form the underpinnings for the upcoming Renault Clio. About 550 of the Logan’s 1,300 components are borrowed mainly from the Renault Clio, Modus or Megane.
Initially, Renault will offer 75-hp 1.4L and 90-hp 1.6L gasoline engines. A more powerful, 107-hp 1.6L 16-valve engine and a 65-hp 1.5L dCi diesel unit will be available in 2005.
The 167.3-in. (425-cm) long Logan 4-door is the first model of the X90 range. Station wagon, minivan and pickup versions will be added in the future.
“Logan will be on the roads of all the continents, from South America to Asia via Eastern Europe and Africa. So the specifications took account of requirements in the most difficult countries, from the hottest to the coldest,” explains Luc-Alexandre Menard, Renault’s senior vice president-international operations and chairman of Dacia.
For example, Logan’s heating and air conditioning systems are suitable for climates as extreme as those of Russia and the Gulf states.
The first market to see the Logan will be Romania, where it will be launched in September. The car also will go on sale in Croatia, the Czech Republic, Hungary, Turkey and Slovakia this fall, followed by additional markets in 2005.
Romania is particularly important for the X90 project. Dacia is the project’s source plant, its pilot plant and its biggest investment. (See related story: Romania Set to Celebrate With Official Unveiling of Dacia X90)
Apart from Logan program costs, Renault will have invested €489 million ($597 million) in the project by the end of 2004, mainly on upgrading Dacia’s manufacturing facilities.
“Dacia’s production capacity will be increased in 2005 to 200,000 vehicles and 150,000 CKD (complete-knocked-down) kits a year,” says Dacia Chief Operating Officer Francois Fourmont.
Dacia will ship assembly kits mainly to Avtoframos (Russia), SOMACA (Morocco) and Sofasa SA (Colombia) plants, which are to start assembly activities in 2005.
In Russia, Renault is investing €230 million ($281 million). Initial capacity at the Avtoframos plant will be 60,000 vehicles a year.
Last July, Renault decided to invest €22 million ($26.8 million) to set up an assembly line at the Somaca plant in Morocco with annual capacity of 30,000 cars per year. At Medellin-based Sofasa, Renault is investing €16 million ($19.5 million) and will have annual capacity for 44,000 units.
Small-volume assembly in Ukraine also is under consideration. Ukraine’s ZAO ZAZ, which currently builds cars of various brands, may phase out assembly of the Dacia Solenza by the end of 2004 and launch the Logan in early 2005. However, no contract has been signed yet, says Ferid Annabi, head of Renault’s office in Ukrainian capital Kiev, which is responsible for Ukraine, Belarus, Armenia and Georgia operations.
In spring 2006, Renault plans to start an ambitious assembly project in Iran, where the Logan will be produced at Iran’s largest vehicle maker, Iran Khodro Co., as well as at the Saipa Group’s Pars Khodro car plant. Each plant is expected to manufacture at least 150,000 units a year. (See related story: Renault Reaches Pact on Iranian Production)
Andreas Gabriel, head of Renault Pars, the French-Iranian joint venture that will coordinate Renault’s activities in Iran, expects combined production of 300,000 cars to be reached in 2007, the first full year of output.
In contrast to Russia, Morocco, Colombia and Ukraine, Renault will start with a high local content in Iran. “Our local content is to be about 50% at the beginning,” Gabriel says.
Considered likely but not yet finalized is an agreement for Logan production in China. Renault’s potential partner is theGroup, which already has a joint venture with Renault alliance partner Motor Co. Ltd.
Schweitzer expects the Logan family to reach annual sales of at least 700,000 units by 2010. This figure, which includes expected China production, is rather “conservative,” Schweitzer says.
Additional production sites for the new model are possible, including Brazil and India.
“We are still in very hard competition in Brazil, so we are making our best efforts to balance our activity in Brazil and to break even, and we have not at this stage fixed the next product plan,” explains Georges Douin, Renault’s executive vice president-product and strategic planning and international operations. “So when we do it, maybe we shall consider this car, or a member of the family, but obviously the X90 program as a whole will be considered.”
According to Douin, India is not in the planning so far. “But India, of course, is a very competitive market, with a demand of low-priced cars, so if we will go sometimes to India, this car could be a candidate,” Douin says.
Although Renault continues to refer to the Logan as the €5,000 car, only a few customers, mainly in Romania, will have the opportunity to get one at that price. Even in Romania, the Dacia Logan will debut in more expensive form with a base price around €5,700 ($6,960). A €5,000 version won’t be launched there until 2005.
In other countries, the price will depend on local import duties, taxes and market situation. In the countries of Central Eastern Europe, such as Slovakia, the price may start around €6,500 ($7,937).
Previously, Renault has said the new model won’t be sold in Western Europe, but that now appears unclear.
“It has not been decided yet, we shall look at it carefully,” Douin says of possible exports to the West. “Maybe, if the demand appears, we shall also sell it in Western Europe.”
That wouldn’t present any technical problems. The Logan is built to comply with the safety and emissions standards in force in the European Union, as it will be sold in the new EU member countries. Logan’s engines are in line with the most recent emission control standards and have Euro4 approval.
Even if it isn’t exported to the “old” Europe, Renault will assure service is available in Western Europe.
“Every Renault dealer in Western Europe will be in position to repair the Logan starting from fall this year,” says Christine Tissot, responsible for Logan international after sales activities. Logan-specific spare parts will be stocked in Renault’s West European warehouses.