Logan in, parks next to Indigo
THE much-awaited Logan is finally here. Positioned as a value for money sedan, the Mahindra Renault JV has priced the base version fitted with 1.4-litre engine at Rs 4.28 lakh, ex-showroom Mumbai, while the diesel variant will be available for Rs 5.57 lakh. Logan is the first Renault product to hit the Indian market and the first right-hand drive car from the French car-maker. The Mahindra-Renault joint venture will be rolling out 50,000 units of Logan this year from Mahindra’s Nashik facility set up at a cost of nearly Rs 700 crore. M&M holds 51% equity in the joint venture with Renault holding the remaining. Speaking at the launch ceremony, Renault president and CEO Carlos Ghosn claimed that the total project investment has been 15% lower than forecast and has helped in pricing it lower. He expects Indian car market to grow to 2 million units by 2010 from around 1.1 million in FY06. “It is truly a world car which offers compelling value proposition to a typical Indian car buyer. It will open-up a new opportunities for both the partners in the Indian automobile market,” M&M vicechairman and managing director Anand Mahindra said. Initially, Logan will hit the roads in the top 10 cities of the country, followed by a national launch by November this year. By that times, JV hopes to have a national network of 120 showrooms and dealerships across the country. Logan has been launched with 50% localisation, with engines and drive trains imported from Renault factories in Romania and Spain. It will gradually rise around 70% by the end of FY08. Targeted at upper end B-segment and lower end C-segment car buyers, Logan is expected to fuel another round of price war in the car industry as existing players try to protect their turf against the new entrant. In terms of price and positioning, Logan is likely to compete head-on with Tata Indigo, which is priced equally aggressively and offers diesel variant. The company however, refused to divulge its sales target for Logan for FY08. Though, Logan offers an interesting package with the widest rear seat which can comfortably seat three people, it has to be seen how it succeeds in building brand equity in a segment dominated by Honda, Maruti-Suzuki and Hyundai. Some analyst fear that Logan offers such a strong value-formoney that it may end-up being used as a fleet taxi like Tata Indica/Indigo. This will hurt its brand equity among individual buyers and may hurt its long-term prospects. Specially developed for emerging markets, Logan was developed by Renault and its Romanian affiliate Dacia. It has sold almost 450,000 units worldwide since its launch in 2004.
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