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    Logan Case Study

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    inews_cyberminds
    Renault launched the Logan as a low-cost "world car" designed for emerging markets. Manufactured in Romania, the Logan had a simple design and used locally sourced materials to keep costs low. It was initially successful in Central and Eastern Europe when launched in 2004 but did not see the same response in Western Europe. In 2007 Renault launched the Logan in India through a joint venture but it ultimately failed there due to issues like not being significantly cheaper than competitors and high import duties imposed by the Indian government.

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    Logan Case Study

    Uploaded by

    inews_cyberminds
    2K views18 pages
    Renault launched the Logan as a low-cost "world car" designed for emerging markets. Manufactured in Romania, the Logan had a simple design and used locally sourced materials to keep costs low. It was initially successful in Central and Eastern Europe when launched in 2004 but did not see the same response in Western Europe. In 2007 Renault launched the Logan in India through a joint venture but it ultimately failed there due to issues like not being significantly cheaper than competitors and high import duties imposed by the Indian government.

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    Logan Case study

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    Renault launched the Logan as a low-cost "world car" designed for emerging markets. Manufactured in Romania, the Logan had a simple design and used locally sourced materials to keep costs low. It was initially successful in Central and Eastern Europe when launched in 2004 but did not see the same response in Western Europe. In 2007 Renault launched the Logan in India through a joint venture but it ultimately failed there due to issues like not being significantly cheaper than competitors and high import duties imposed by the Indian government.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    2K views18 pages

    Logan Case Study

    Uploaded by

    inews_cyberminds
    Renault launched the Logan as a low-cost "world car" designed for emerging markets. Manufactured in Romania, the Logan had a simple design and used locally sourced materials to keep costs low. It was initially successful in Central and Eastern Europe when launched in 2004 but did not see the same response in Western Europe. In 2007 Renault launched the Logan in India through a joint venture but it ultimately failed there due to issues like not being significantly cheaper than competitors and high import duties imposed by the Indian government.

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    At a glance
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    The key takeaways are that Renault is a French automaker with a long history. They launched the Logan project to develop a low-cost car for global markets through their acquisition of Dacia.

    Renault was founded in 1898 and primarily did assembly operations. It became a major manufacturer of vehicles and aircraft engines. It was nationalized after WWII and later privatized, forming partnerships with other automakers.

    The Logan project was Renault's decision to expand into markets outside of Western Europe through their acquisition of Dacia. Their first product was the mid-sized Logan sedan, designed to be an extremely affordable vehicle.

    Logan: Renaults low cost world car

    Presented by: (Group 4) Alok Sanghvi Ronak Jasani Saumya Singhal Shailesh Gupta Sachin Jain Sandeep Kejriwal

    BACKGROUND

    Set up in 1898 by Louis Renault


    Primarily an assembly operation Also manufactures Taxi cabs, Buses & Commercial cargo vehicles Started experimenting with Aircrafts & Army tanks and soon became the biggest manufacturer of Aircraft Engines in the world

    First car VOITURETTE 1 CV

    CONT

    After WW1 it diversified into agriculture & industrial machinery


    1939-45 (WW2) commissioned to produce trucks for Nazi Germany which halted the production of passenger cars Louis died in imprisonment Company got nationalized

    Entered into technological cooperation with VOLVO and Peugeot


    Purchased 46.4% stake in American Motor Corporation(AMC)

    Renault 4 CV

    Dauphire

    Renault 4

    Renault 8

    Renault 5

    CONT

    Despite success with passenger cars, the company began making losses in 1980s Sold off its stake in AMC to Chrysler corporation for $200 million In 1990 - Got incorporated as Renault, which was the first step towards privatization Launched several successful car models like CLIO, Espace, Twingo, Laguna & the Renault 19

    CONT

    1999- Made a cross-holding alliance with Japans NISSAN Motors for $3.5 million for 36.8% equity stake Also acquired Romanian auto company DACIA for $50 million Acquisition of a 70% stake in South Korean SAMSUNG motors for $512 million Became the fourth largest company in the world after GM, Toyota Corp. and FORD

    PROJECT X90

    Strategic decision to expand its presence in market outside western Europe STP

    Renault acquired Dacia in 1999


    Low cost vehicles for the market First product a mid sized passenger saloon Sell the X90 under a brand name LOGAN

    THE MAKING OF LOGAN

    Designed to strict specifications Different from other cars

    Best Technology and shared expertise


    Vision and Mission Competitive advantage Idea behind

    KEEPING COST LOW

    Logan was a Design-to-Cost project.

    Manufacturing the Logan at Dacias Mioveni factory.


    Sourced most of production material locally. Costs control by keeping structure of Logan simple.

    Symmetric parts made tooling and assembling easier.


    Logan was a completely computer-designed by designers.

    LOGANS SAFETY & SPECIFICATIONS


    Safety Measures: Designed as per EU safety norms

    Top-end Logan include Anti-lock Braking System Total safety for driver as well as passenger Honeycomb type structured Dashboard Logan structure was designed to disperse kinetic energy due to impact of collision

    CONT
    Technical Specifications:

    Logan was a three box saloon.

    Developed with two engines versions.


    In 2005 Logan was launched with 1.5 dci diesel engine.

    THE LAUNCH & ITS AFTERMATH

    Renault launched Logan in June 2004 priced at 5000 Euros First launched in Romania and then in Central and Eastern European markets High potential for cheap cars Initial response to Logan was very positive Reaction to Logan in Western Europe was not anticipated

    CONT

    In June 2005, Renault launched a modified version of Logan for customers in Western Europe
    In 2005, Renault sold 145,000 units of Logan world wide In April 2007, Logan was launched in India through a joint venture between Renault and Mahindra and Mahindra

    THE PROSPECTS

    Launch of Logan MCV, a station wagon in 2006


    Launch of minivan version in 2007

    Biggest strength:- Low price


    Logans market not limited to lower income groups Main shortcoming:- Looks of the car Low end version lacking basic features Logans average rating of 3 in Euro NCAP tests

    CONT
    Impact on other car manufacturers: Volkswagen announced a project codenamed 3-K

    Manufacturers in developing countries were also working on extremely low-priced cars.

    Toyota announcing radically different process of car manufacturing

    CONCLUSION

    Logan making a mark on global automobile Industry Only one doing cost reduction aggressively

    Renaults design-to-cost approach giving them an edge over others.


    Others failed due to wrong cost structures & lack of recouping costs from upgrades & extras.

    WHY DID LOGAN FAILED IN INDIA?

    Price hardly lower than its competitors High import rate

    Indian Government coming up with double excise duty


    Problem with distribution channels

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