The Dacia Logan was one of the earliest low cost cars designed specifically for developing markets such as Eastern Europe. Renault, who owns Romanian Dacia, found success with the Logan and even started sales in Western Europe, which wasn’t part of the project’s original goals. India was supposed to be the next frontier, projected to bring in massive volume (and profits) but it hasn’t worked out that way.
Renault partnered with Indian manufacturer Mahindra & Mahindra to make and market the Logan, but dismal sales has resulted in production being slashed to 500 units per month, way below the projected 50,000 units per year. It seemed that they had underestimated Indian consumers, who weren’t impressed by the Logan’s basic looks and spec, but not so basic price. The JV started to lose money, and a strain started to develop between the partners. So when Renault recently decided to set up its own production and sales unit in India, everyone saw the writing on the wall for the partnership.
However, the latest news is that the two parties have avoided a divorce and will soon announce a new restructured plan. The Logan will be repositioned as a “small car” with overall length reduced to below 4 metres. This is to comply with India’s car size boundaries for the Logan to attract a lower excise of 10% (currently 22%). The petrol engine’s capacity will be brought down to 1.2 litres from the current 1,400-1,600cc. The 1.5-litre diesel will remain. All these tweaks will give the Logan a more competitive price. At present, the base Logan 1.4 GL costs 452,629 rupees, which is more expensive than a base Maruti Swift at below 400,000 rupees (ex-showroom, Delhi).
Should Proton enter the Indian market with the Saga, it will also face the same problem as the Logan, since the Saga’s overall length measures 4,257 mm. Of Proton’s current cars, only the Savvy and Satria Neo hatchbacks duck in below 4 metres.