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Low cost cars ‘are way forward’

A mobile phone that simply makes and receives calls is all many of us want. That is the philosophy behind Renault’s expanding Logan range, according to product and strategy chief Patrick Pélata.

The low-cost Logan has sparked something of a phoney war among car makers. “We know both Toyota and Hyundai are claiming to be developing low-cost cars but we don’t know what or when,” said Pélata, speaking after the launch of the Indian version of Logan, the first right-hand drive application for the car.

Mahindra Renault has delivered Logan, substantially revised for the Indian market, 15% below budget and one month ahead of schedule.

His view on low-cost cars was reinforced by Renault chief Carlos Ghosn. He believes that India is the place where car makers can learn to be frugal and build 'low cost cars that aren’t low quality, have high functionality but no added value.' There is, said Ghosn, a “global need for simple cars even in developed countries.”

But simple cars doesn’t mean small cars, he said.

Mahindra Renault, the joint venture between Renault and Mahindra & Mahindra, is promoting the Logan as “India’s first wide body car.”

Next for Logan is Iran where it will be built at two joint venture plants. In the first week of pre-sales, 85,000 orders were taken, each accompanied by a 51 per cent deposit on a car costing the equivalent of €6,750. Local content for the cars will be 60 per cent at the start of production this month; total production is 150,000 units at each of the two plants.

Pélata said that there is a huge pent-up demand in Iran where new car sales this year are expected to reach one million.

“Demand is 30 to 50% ahead of availability. It is a risky business but being entrepreneurial is risky. Renault is well equipped for Iran and there is no political reason for us not to do it,” he said.

Logan will also be built in Russia, Brazil and Argentina.

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