Renault Revived by Low-Cost Logan
January 07, 2008

Strong demand for low-cost cars in developing countries helped France’s Renault return to sales growth in 2007, the Financial Times reports.

Renault’s no-frills Logan car, which retails for the equivalent of $8,566 to $11,225, was the company’s most popular model. Renault sold more than 360,000 Logans; about 15% of all vehicles sold by the Renault group are Logans.

In Latin America, Asia and Russia, the Logan is sold under the Renault brand. In Europe and North Africa, the Logan is sold under the Dacia brand, the name of Romania’s former national car producer in the Soviet era, which Renault bought in 1999.

The Renault group’s fastest-growing region was eastern Europe, with sales in Russia, Romania and Ukraine all rising more than a third. Russia, Romania and South Korea – where Renault took over Samsung’s car manufacturing operations – are the only countries outside western Europe in which Renault sells more than 100,000 cars a year.

The group has set ambitious targets for the new year to more than quadruple the rate of worldwide sales growth, and return the sluggish western European market to growth. A Renault executive quoted by the Financial Times said the French automaker is forecasting sales increases in every region, for total growth of 10%.

Still Signs of Trouble

Despite its success in some regions and with the wildly popular Logan,  Renault still faces trouble, the Financial Times points out, in particularly in its core Western European market where sales continued to slide.

Total car sales for the Renault group rose 2.2% in 2007 to 2.49 million units. However, within the group’s western European market, where 65% of its products are sold, sales dipped 4%. Still, it was an improvement from 2006, when sales in the region fell nearly 9%.

“The 2007 sales results are in line with our forecasts, down in the first half of the year and back to growth in the second half, driven by new products like the new Twingo and the new Laguna,” said Patrick Blain, executive vice-president for sales and marketing, told the Financial Times.

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