I can see the Dacia range doing well in the UK. They're smart looking cars, and in the case of their MPV, its a budget car which has got that one thing that MPVs don't normally have - style.

Sold through selected Renault dealers, given bright exterior and interior colour schemes, packaged with a decent warranty and given an exciting advertising campaign to kick things off, Renault could provide Skoda and Seat with a poke in the eye.

 

The Logan is a smart looking car, and I would prefer the MPV version to a Twingo or Berlingo Multispace...

 

Interesting point I missed completely earlier: the capacity of the Indian plant is only 50,000 cars a year. Thats to build a cheap, budget car which traditionally needed to be built in huge volumes to make profitable.

I'd love to see the business model behind that.

 

Part of the answer might be that Mahindra is using a pre-existing plant in Nashik, which presumably produces other products alongside the Logan; so it may be no more difficult than when MG Rover was builtding 12,000 TFs per year at Longbridge alongside their higher-volume models.

Renault's JV agreement calls for Mahindra to build a new, dedicated factory on a greenfield site with a capacity of 500,000 cars p/a within 5 years, so the currently planned 50,000 Logans a year is just sort of setting the stage for bigger plans later on.

 

I drove one of these recently in Morocco. It was a 1.4 litre 4 door saloon like a Renault Clio saloon which we also don't get in the UK, and it also reminds me of the old Renault 7 which was a booted Renault 5.

I can say this car was great for the money and its stripped out of all the electronic gizmos that people don't really want as they cost money and go wrong. I think there is tremendous potential for such a motoring niche and one which NAC could exploit using the MGR legacy brands.

 

Having been to Romania it is the country's best selling car. They are good as a budget car and far more appealing than some may think. Romanians think its the best thing since sliced bread. It is also built in Turkey, Morrocco and Iran I think. 50,000 a year isnt much but then look at the capacities of the other Logan plants.

 

You don't need large production volumes in a low wage economy. Its in the west where the problem of trying to build lower priced cars doesn't work in small numbers. The build cost difference between a Ka and a Mondeo for example is not as great as the retail price suggests......

 

You do. You are forgetting that the Logan is effectively only an assembly job, the costs of design etc have all been taken care off and we are now into marginal pricing when it comes to India.

 

Originally Posted by Adrian Robertsh: You don't need large production volumes in a low wage economy. Its in the west where the problem of trying to build lower priced cars doesn't work in small numbers. The build cost difference between a Ka and a Mondeo for example is not as great as the retail price suggests......

I think you hit the nail on the head. Just look at how many small automakers existed in Western countries before WWII, and how many of them were even able to fund their own R&D on <50,000 units p/a. Real wages in the West were much, much lower in the first half of the 20th century than they are today, so high volumes weren't as important for profitability.

 

the dacia logan is selling like hot cakes around here (morocco).
there's also another dacia model built and sold exclusively for taxis which looks like those roumanian renault12 lookalikes.

the logan is a decent car for the price, but when you see it everywhere, it's really a pain in the... eyes.
the boot design reminds me of the the facelift rover 45.

 

the dacia logan is selling like hot cakes around here (morocco).
there's also another dacia model built and sold exclusively for taxis which looks like those roumanian renault12 lookalikes.

Ahh the Dacia 1300 - crummy but iconic as a result!

 

They sell 12,000 per year in Morocco.

 

You don't need huge volumes because not much investment goes into Robots. It's almost built like a kit car...

 

Depending on how low the wages are, equipping an assembly line with robots might actually be more expensive than just hiring a few thousand workers to do everything manually. India might not be quite that cheap, but for such low volumes, who knows?