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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Excerpts

Project X90

In the mid-1990s, Renault, under the direction of the then chairman and CEO Schweitzer, made a strategic decision to expand its presence in markets outside Western Europe...

The Making of the Logan

Logan was a car designed to strict specifications. The designers were given clear requirements with regard to the size, design, and most importantly, the cost of the car. Given that Logan was intended to be a world car, Renault also had to ensure that the requirements of all the markets were met. Renault approached the development of the Logan as a completely new project. Typically, low priced cars were stripped down versions of popular cars. Sometimes manufacturers also remodeled outdated versions of cars sold in the developed markets, for developing countries...

Keeping Costs Low

Because the Logan was meant to be sold in markets in developing countries, the cost of the car was a critical factor in the design. The Logan was a 'design-to-cost' project. The complete design of the car and all its elements were finalized keeping in view the targeted sale price of 5,000 Euros. The Logan did not have to stand out in a crowd or make heads turn. But it had to provide the best possible features at the designated price point. Therefore, it was designed as a modern car stripped of costly design elements and superfluous technology...

Safety

Although Logan was a no-frills car, Renault claimed that no compromises had been made on safety. The designers adapted the safety solutions used in state-of-the-art Renault cars to make them suitable for the Logan. Logan was designed to meet the European Union's safety norms. The top-end Logan included an Anti-lock Braking System (ABS) similar to the one used in the Megane. ABS was an optional feature in the lower-end version. The top-end Logan also included driver and passenger airbags, and backseat safety belts for three in the rear passenger cabin...

Excerpts Contd...>>

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