Renault will unveil a car for emerging markets costing €5,000 (£3,325) today in a move designed to add 30% to the French carmaker's sales by the end of the decade.
Renault believes the X90 car range, first available as a saloon, can sell 700,000 units a year by 2010, making it the company's single biggest seller and adding almost a third to last year sales of 2.39m. It will also support Renault's attempts to reduce its reliance on western Europe, which has been providing all its profits and most of its sales.
The X90 is the most ambitious attempt at a “world car” for emerging markets since Fiat's Palio, the X90 is unlikely to be sold in western Europe, although it is designed to meet European safety regulations.
By making the car extremely cheap to produce, Renault can make operating profit margins of 4-5%.
The car shares its underlying body structure with the Nissan Micra, Renault's Japanese partner, which will help to reduce costs. The same platform will also be used for the next generation Clio and the Modus small people carrier.
The X90 will be built exclusively in low-cost countries, giving it access to wage levels far below those in France.
The entry level vehicle will come without electric windows, airbags and ABS brakes which now come as standard on more expensive cars.
Renault will unveil a car for emerging markets costing €5,000 (£3,325) today in a move designed to add 30% to the French carmaker's sales by the end of the decade
Production will start this year at Renault's Dacia subsidiary in Romania, which has been building the Dacia 1300, a copy of the 35 year old Renault 12.
Dacia is hoping to build 200,000 cars a year for eastern Europe and will be followed by factories in Iran, Russia, Morocco, Columbia and probably China and India.