Renault in Romania: Prospects and Challenges



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Code : COM0097

Year :
2005

Industry : Automobiles

Region : Romamia

Teaching Note: Not Available

Structured Assignment : Not Available

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Introduction:Slowdown in growth in the Western European automobile markets during the early nineties diverted French automobile manufacturer Renault's focus towards the Central and East European regions. Renault also decided to introduce a low-cost car, Logan, for markets in that region.

The company planned to set up its manufacturing base in Romania, which had emerged as a favorite destination for automobile manufacturers. To take advantage of the low-cost and skilled labor in Romania, Renault bought a majority stake in the Romanian carmaker Automobile Dacia SA (Dacia) in 1999.

In 2004, Renault launched Logan, which became successful. Renault planned to take Logan to other countries as well by making Romania as a base. However, critics were of the opinion that Renault would not be able to take advantage of its low-cost operations in Romania in the long run.

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