Popular Demand for Renault in Eastern Europe

Due to popular demand for a cheap car, Renault will launch its Logan model, produced in Romania, in Western Europe starting with France on June 9 and Germany on June 17.

About Renault in Romania

Logan is built on the Renault-Nissan B platform found under the Nissan Micra. It will also be used for the next Renault Clio. The Logan uses the front axle, door handles and steering wheel from the current Clio, and the heating system is the same as what will be used by Renault on other B segment cars.

When French car maker Renault reentered negotiations to buy the Romanian car maker Dada in 1998, some thought it was a job too far, even for a company with Renault’s fortitude and deep pockets.

Dacia, in which Renault now has a 92.7 percent stake, is on track, he says, but it’s a rocky track so the turnaround takes time. Part of the problem is reducing the vast communist-era workforce. This stood at 27,000 in the late 1990s; early plans saw it being reduced to 16,500 under an agreement with unions and the government.

Renault is already ahead of the game here (Romania), having cut the workforce to 14,000, despite angry protests in February at the plant in Pitesti, some 60 miles north west of Bucharest.

The workers at Dacia built just 55,000 cars last year with 60,000 scheduled for this year. “Our plan is to be producing 200,000 cars a year by 2007,” Georges Douin, Renault’s executive vice president says.

Logan / Renault-Dacia
A Renault-Dacia model called ‘Logan’ is driven in the car park of the Dacia factory in Mioveni, Romania.

A critical part of that plan comes this year with a major facelift for Dacia’s own Super Nova–a robust Ford Focus-sized vehicle. It gets a new name, Solenza, as well.

The low price–that $5,000 sticker is only on the entry-level model–is achieved in Romania “by using local content in depth,” he says.

Although built off the Renault-Nissan B platform, which has already spawned the new Micra, the X90 “is at a level below what we would do for Clio or Micra.” That should give a cheap and less sophisticated car which, “could be sold in Poland or in Portugal if those countries want it, and it can be maintained by the Renault dealer network,” says Douin who believes that Renault’s job in Romania “is 60-70 percent there.”

Romania is somewhat further down that rocky eastern European track than in Russia. After four tricky years getting its Avtoframos joint venture off the ground, Douin feels that the worst is behind them. Avtoframos is, a venture between Renault and the Moscow city government using the old, decrepit Moskvich car plant, part of which Renault is slowly overhauling.

“In Russia we are planning a total investment of (about) $230 million and have currently invested $170 million. Our capacity will be 60,000 units a year and our plan is to have an 8-10 pecent market share within five years.” This year, Avtoframos will produce 8,000 SKD vehicles, based on the Clio built in Turkey.

Popular Demand for Renault in Eastern Europe (Reuters/Bogdan Cristel)
Romanians work at a Renault-Dacia model called ‘Logan’ at the Dacia factory in Mioveni, 130 km (81 miles) northwest of Bucharest, Romania, June 2, 2005.

But there is better news from the Far East where Renault’s Samsung subsidiary (Renault has a 70.1 percent stake in the company) is making money two years ahead of schedule.

Source: Anthony Lewis, Automotive Industries