Logan: Renault's Low Cost 'World Car'


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Case Details:

Case Code : BSTR261
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

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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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Logan's Indian Launch Contd...

The Logan was Renault's world car9 . As of mid-2007, it was being manufactured in seven countries - Romania, Russia, Morocco, Colombia, India, Brazil, and Iran - and sold in 55 markets. The Logan had been conceptualized at a point in Renault's corporate history where the company had made a strategic decision to explore markets beyond Western Europe, the United States, and Japan. Consequently, Renault decided to design a new car that could be sold in the developing parts of the world - a market that was often not considered significant by the major auto manufacturers. The Logan's design and development had been meticulously planned around a targeted sale price of 5,000 Euros, so as to be affordable to customers in developing countries. 

This made the Logan the cheapest car in its class when it was launched. Eventually, the Logan became so popular that there was demand for it even in Western Europe, and Renault was able to launch a slightly modified version of the car in that market with some success. 

Background

Louis Renault (Louis), an engineer and the son of a textile businessman in France, set up an automobile company called the Société Renault Frères in 1898. His brothers Marcel and Fernand Renault were his partners in the business.

Louis looked after the technical side of the company, while his brothers took care of the business aspects. Renault was primarily an assembly operation, and procured components like engines, tires, radiators, gears, steel, and electrical equipment from component suppliers to assemble the cars.

The first car made by the company, the Renault Voiturette 1CV, was sold in 1899 to a family friend who, after a test ride, had been impressed with its ride quality. In the initial years, Renault was an active participant in motor racing events, which helped the company gain publicity. Both Louis and Marcel raced for the company, and won several prizes...

Excerpts>>

Business Strategy Case Studies | Case Study in Business, Management, Operations, Strategies, Case Studies

9]  The term world car is generally used to refer to car models that meet the requirements of several different markets around the world. The distinction is made especially with reference to models made for developing countries, where the driving conditions are quite different from the three main car markets - the US, Europe, and Japan. A world car would typically meet the design and safety requirements in multiple markets.

 

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