These days consumers are quick to consider the word “cheap” as synonymous with “good value” and who wouldn’t be tempted by Renault’s cheap, new Logan sedan? But I must warn you this not-so-new and not-so-cheap offering has a rather unsavoury side to it.
When Renault took over control of Romanian automaker Dacia in 1998, it started work on its X90 Project at its newly acquired Pitesti factory near Bucharest. The brief was for a “value-for-money car with a lot of space and the stately look of a sedan”. What rolled off production lines in 2004 was the Logan sedan. In its five years of production, in 59 countries, Renault has sold more than one million Logans.
At the heart of Renault’s X90 Project was Nissan and Renault chief executive Carlos Ghosn’s original business model. The model called for the Logan to be designed down to cost, using economies of scale and carry-over components to create nine models on the same platform by 2012.
What results for the end user, thanks to the simple tooling in its factories and the use of low-cost, low-skill labour, is the Deutsche Bank’s estimate that each Logan costs Renault €1 100 to produce. By using locally sourced suppliers near the factory for non-Renault components, €100 is saved per vehicle.
This business model drove significant growth for Renault in 2007, with Logan sales improving 48% worldwide, accounting in just one year for 368 000 of its one million-plus units sold to date. The plan to introduce the Logan to South Africa was hinted at as far back as 2005, but took shape only when right-hand-drive models started coming out of India in 2007.
This was months before strike action began at Logan headquarters in Pitesti in March 2008. Dacia’s workers demanded wage increases not based on average local wages but on wages paid at other European Renault factories. Workers demanded a pay increase with benefits, while complaining of stressful working conditions and production lines that never stopped running. But the Pitesti plant produced 400 000 Logans in 2008, despite the strike action, which translates to 60 Logans an hour.
Renault’s Russian concern, AvtoWAZ, using an old Cold War factory, boasts a production capability of one million Logans a year and is reputed to offer wages of €200 a year.
The cost saving such a business model offers to the consumer is beyond question. South Africans have been buying more Logans than all other Renault products combined so far in 2009. But it appears not even budget offerings such as the Logan are exempt from the strains of the global credit crunch.
Logan production at Mahindra’s Nashik plant has been cut by 60% since its introduction to South Africa late last year. Sporting a price tag of R99 500 at its launch, it now costs R106 900. As it is imported from India a crucial part of the Logan business plan — building close to its customer — is not satisfied by the Logan in South Africa. Dacia Logans retail for a Euro equivalent of R83 000 in Romania.
That is the business side of the Logan; I should delve into the experience of what the Logan is like to drive.
It is awful. Unrefined, noisy, slow, uncomfortable and indifferently styled, it deserves an instant disqualification in the first heat. A loathsome aspect of the car is the bolted-down rear bench, which sales people try to sell as giving the Logan “one solid passenger cell”— hmm, I’m not sure about that one. In fairness a few things in its favour are the driver airbag, trip computer, MP3/CD player and its half-decent ride.
But having said that, the biggest problem with the Renault Logan is how it makes you feel.
Being stuck behind the wheel evokes an extreme malcontent for the world. It’s like driving in your bad credit, your eviction notice or your child maintenance payments.
Stray dogs howled as it drove by, refuse bags stuck stoically to its grille, cats engaged in fights at the feet of its steel wheels and one day it dragged an empty yogurt tub under the front suspension for the company.
The Renault Logan is “cheap”, but it’s old as well and that stops it from being “good value”.