Renault CFO: Nissan-Renault Set for Small, Cheap Car Boom
October 22, 2007

TOKYO – Renault intends to launch a next-generation Logan that costs even less to build than the current one while the automaker simultaneously develops a still cheaper car for India, the chief financial officer of the company told a group of reporters in Tokyo.

Thierry Moulonguet, Renault CFO and chairman of the Nissan-Renault management Committee for the Americas, told reporters in Japan for the Tokyo auto show and the world debut of the Nissan GT-R supercar that the automaker is positioning itself for an expected surge in small car sales globally.

Moulonguet said engineers and designers are working on the second-generation Logan due in 2012 that will cut costs by 15 percent of the original Logan, which has a starting price of about $5,000. Separately but simultaneously, Nissan-Renault is working in partnership with Indian electric rickshaw and motorcycle maker Bajaj Auto Ltd. on a completely new small car for India that will start at $3,000. India-based automaker Tata has announced a similar intention.

"We see this as the segment of the future," Moulonguet said. "Our early launch of the Logan puts us in a good position for selling a car at a very low price."

Indeed, worldwide, sales of small cars are expected to grow by 30 percent to 27 million vehicles by 2013, thanks to the surge in emerging markets, CSM Worldwide Inc. forecasts.

Since introducing the first Logan sedan in 2001, Renault has introduced six versions, including a multipurpose vehicle and a station wagon model. Next year, Renault introduces the Sandero, a more refined version of the original Logan that was unveiled at the recent Frankfurt auto show and will be built in Brazil. A crossover version arrives in 2009. More Logan-based models are planned for introduction between 2010 and 2012.

In addition to multiple versions, Renault builds the Logan in multiple locations. The first sedans came from a factory in Romania. Since then, Renault has opened Logan plants in Russia, Colombia, Morocco, Brazil and Iran. Along with the plants, Renault has attracted and developed a local supplier base for the Logan as well as other models, including some yet to come.

That has created a “global blueprint” for Renault to expand upon, Moulonguet said.

And Renault has built sales. This year, it will sell 800,000 Logan models.

Moulonguet ruled out selling the small, cheap Renault Logan in the United States, badged as a Renault or Nissan. He said the Nissan Versa covers that territory well in the States and the Logan is aimed at emerging, not mature, markets.

However, he sounded like the options were being kept open, pointing out that the Logan is sold in Mexico as a Nissan. Further, Renault never intended to sell the Logan in Western Europe but today sells it in Germany, Spain and France for under 10,000 Euros. The latest station wagon model is most successful in Germany.

“Today we sell 80,000 in Western Europe while our initial expectation was zero,” Moulonguet said.

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