Logan, the brand that changed a group's image

The Logan model, part of the Dacia range, assembled at the plant in Mioveni, has managed to steal the limelight from Renault’s Formula 1 team, as well as other future models, explained Carlos Ghosn, the French group’s CEO, who revealed the financial results for 2007.
Unlike at previous events, the attention was not on Formula 1, but on the new Logan. The new low-cost car was designed during a period when Louis Schweitzer was at the helm of Renault and specifically for the Dacia plant in Mioveni, which the French carmaker acquired in 1999.
The Logan model, which registered sales of above 230,000 units in 2007, is Ghosn’s third major success. After turning around Nissan and set Renault on a new track, Ghosn, nicknamed “cost-killer”, demonstrated that low-cost Logan cars did not necessarily mean low profit.
In this respect, last year’s results speak for themselves. The Logan registered an operating margin of 8% in Romania and of 6% abroad, whereas at a group level Renault registered a 3.3% operating margin.
Logan’s main advantage is that it not only registered successes on emerging markets, such as Romania, Russia and Morocco, but also in France and Germany, after the latter two proved to be its biggest markets in 2007 after Romania.
Logan sales exceeded 32,000 units in France last year, which is the same as the best-selling import brand in Romania, Renault.
Together with Toyota the company with the best manufacturing system and the highest efficiency, Logan could be the brand that has the biggest impact on the car industry. So, why is Renault talking about Dacia and Logan, rather than its future plans? Ghosn provides an explanation.
“We need to consider growth resources. Over 65 million cars were sold globally last year. Of these, around 40 million were sold on mature markets, such as the US, Japan or in Western Europe. However, these markets are either in decline or stagnating. Growth comes from emerging markets,” Ghosn emphasised.
Logan is especially designed to appeal to emerging markets and help the group reach a 6% operating margin in 2009. To sustain the sales boom, Renault will boost its production capacity at Mioveni to over 400,000 units in 2009, with 75% set to be exported.