France's Renault Takes a Detour
Modest Model Snapped Up by Europeans Tired of Pricey Cars

By Molly Moore
Washington Post Foreign Service
Thursday, January 26, 2006

BOULOGNE BILLANCOURT, France -- In the automotive world, where faster and fancier are the buzzwords, Gerard Detourbet is a maverick for the 21st century: "I don't want to be the best," the Renault executive says. "I want to be the cheapest."

With the French car manufacturer facing plunging sales in saturated high-end, high-priced markets around the world, Detourbet set out to create a low-cost car for the masses in the hottest new international marketplace for cars -- developing countries with rapidly growing middle classes.

But in the six months since Renault rolled out the Logan -- a boxy, no-frills vehicle with a $6,400 sticker price -- customers beyond just Romania and Russia have lined up to buy. Fed up with expensive automobiles loaded with gadgets they never used, car buyers in France, Germany and Spain have put their names on waiting lists more than three months long to own a Logan.

"It was a surprise," said Pascal Pozzoli, who runs a Renault dealership in this town on the southwestern fringe of Paris. "The customers come from every social and professional category."

On a recent dark winter afternoon, Jan Radzynski, a 73-year-old retired engineer with a wide, crooked smile and halo of white hair, climbed out of the roomy back seat of an azure model in the dealership's expansive showroom. He declared the Logan the perfect car for his vacation house on France's southern coast.

"It's a new approach," said Radzynski, poking his head into the front to examine the stripped-down dashboard. "It's the kind of car you can repair yourself. Price and simplicity -- that's what I'm looking for."

Like most West European customers, Radzynski said he would upgrade the basic model to include air conditioning and a few other extras, bringing the price to just over $12,000 -- still several thousand dollars cheaper than the base price of the closest competing Renault models.

In the car's first six months, Renault sold 13,719 Logans in Western Europe, nearly as many as it sold in its targeted markets in the formerly communist East, according to Renault officials. Worldwide, the company sold 145,000 Logans, officials said.

The West European market has been so successful that Renault began offering the Logan in Italy earlier this month and now plans to expand sales to Austria, Belgium and Switzerland.

"People buy it more out of practicality than passion," said Pozzoli, who noted that he has sold Logans to the chief executive of a major company, an airline pilot and families in search of an economical second or third car. "They're not looking for power. They're looking to get from one place to another."

But Western Europe's cheap, practical car remains the stuff of dreams in the countries Renault originally targeted for the Logan. In Iran, where production is scheduled to start later this year, Renault officials believe there is a market for 500,000 sales a year, as middle-class Iranians look to replace aging indigenous cars that haven't changed designs in decades.

In India, where Renault plans to start producing the car next year, the Logan is aimed at upper-class and upper-middle-class buyers in search of a showy new foreign vehicle to drive their families through India's choked city streets.

"There's a reason Renault is getting a lot of attention with this car," said Adam Jonas, a European automotive analyst at Morgan Stanley in London. "They're the only one doing this so aggressively. If they are successful, there will be followers."

While other companies have produced low-cost vehicles often called "world cars" for sales in emerging market countries, Jonas said the Logan is the first major project of its type in nearly a decade. He said other such ventures have failed, largely because it is difficult to recoup costs when the typical customer doesn't go for a lot of expensive upgrades, the gravy that brings profits. Most basic cars in emerging market countries sell with virtually no added frills.

The Logan currently is produced in Romania, Russia, Morocco and Colombia. The chunky car seats five people comfortably and has voluminous trunk space.

Detourbet's team of 40 to 50 designers, engineers and other specialists designed the car on computers, cutting costs by using parts -- door handles, knobs, the gearbox -- from older Renault models, installing a simple dashboard devoid of the gizmos that have become standard in most cars and eliminating most high-tech electronics.

"The only driving force for the concept of the car was cost," said Detourbet, a former mathematics professor who has spent three decades at Renault. "We worked 1 1/2 years in one room, one place, with one objective."

They did not build a prototype, instead putting the car into production directly from its computer-generated designs. Even the car's name was created by a computer. "We wanted a good word with no problems in any language," Detourbet said.

Low labor and production costs in the countries where the car is manufactured also contribute to the low base price.

Detourbet's goal is to sell 1 million Logans a year, primarily in developing nations. But he also revels in the unexpected demand for the modest car in the oversold West European marketplace. He respects customers like 55-year-old Jean Pierre Hug of Paris.

Hug recently gave up his Peugeot 309 and bought a dark-green Logan for just under $11,000, including extras such as a radio-cassette player and side airbags.

"The price was really the determining factor in choosing the Logan," said Hug, who uses the car for shopping in the city as well as drives into the countryside. "But she's also sweet to drive."