Mahindra-Renault`s Logan EDIT: Launched at 4.3 - 6.5lac

[rangaraj]

Article in business standard..

Tushar Pawar / Mumbai/ Nashik December 26, 2006



Mahindra-Renault, a 51:49 joint venture between the automobile group Mahindra & Mahindra (M&M) and French car-maker Renault, would launch the mid-sized sedan car Logan for the domestic market by the second week of February 2007. Its Logan car plant at Nashik will start commercial operations in the first week of January 2007.

Mahindra-Renault has set up its Logan car plant adjacent to M&M’s state-of-the-art manufacturing facility at Nashik. The total investment in the project is around Rs 600 crore. The company has done the final testing of vehicles for making drive vehicles.

It has already started making 3 to 5 vehicles daily and almost 200 vehicles have been made so far, company sources said.

Initially, it will manufacture 90 vehicles daily and then increase the number of vehicles gradually. The company has set the target of manufacturing 50,000 units of right hand drive (RHD) entry-level C segment car- “Logan’ in the first year. The Logan will share stamping division and paint shop of M&M’s Scorpio plant.

About almost half of the partsomponents of the Logan car will come from Europe, while it will source the rest (50 per cent) from 35 vendors across India, including 10 vendors from Nashik. Lear Corporation, JBM Auto, Sharda Motors and Reliable Group are among the major vendors of Mahindra-Renault.

Currently, M&M is manufacturing Scorpio and Bolero utility vehicles at its Nashik facility with manufacturing capacity of 330 units per day. M&M has also said that it would make the Ingenio vehicle in Nashik from 2008 and the work for that has also begun.

The company is building a new body shop (for Ingenio) adjacent to its existing facility at Nashik.

[navdeep]

this is already under discussion in original logan thread

[GeekSrik]

Wow! I didnt expect the logan so early though it was confirmed that tests were going on on the expressways or city streets. Its great to have a sedan like logan come in that early. Perhaps its also a ploy by mahindra to launch it cheap before budget and talk the usual mantra of freight and input hikes in april !!

well, still i do believe that there should be some waiting time. if estilo can have a wait time of upto 3 months in some places, logan surely will have a wait period as well which can make car buyers wait long before they can lay their hands on it after booking.

what would be interesting though is an early test ride review on team bhp!

[GTO]

Man, that is fast! The entry-level sedan segment is due for a shakeup with the Logans positioning as the only "new" car here. The Indigo, Ikon, Esteem brigade have been around for long.

[theMAG]

MM's started to dream big. A good turn for us consumers from yet another homegrown auto company.

[CrAzY dRiVeR]

This early... Guess, indigo will have tough competition... Time for new esteem, and remodelled ikon... Willl the Indigo LWB make it to compete with the logan??? (Havent heard of that thing after the initial test drive reports came in the auto mags)

Tata, M&M, Bajaj auto...

Man! India sure is starting to shine... (Nothing political about this! )

[Equus]

Yep, this space needs some better models for sure. A lot of folks wouldnt mind paying a lakh or so more to get a sedan but are put off by the Esteem/Indigo/Ikon images and go for Swift/Getz..
I bet Logan would deliver better value than any of the current ones!

[ravradha]

Renault designer Kenneth Melville, a Scottish national who joined Renault from Mercedes-Benz (DCX ), spoke with BusinessWeek Senior European Correspondent Gail Edmondson about the secret of making a quality car at a low price. Edited excerpts of their conversation follow:

Q: Is it true that the original design brief you were given for the Logan was a car that could hold, "four adults, a pig, a sink, and 100 kilos of potatoes"?

A: [Laughs] Our product-planning team did research on-site in Romania. And it's true that Romanians use their cars for everything, including the transport of pigs. Until now, they have had small, poorly designed cars -- there was a real need for a car that could transport a lot of goods. The product-planning brief was a value-for-money car with a lot of space. And it had to have the stately look of a sedan.

Q: How did you go about designing a car for 5,000 euros [$6,000]?

A: We had to put the cost element at the forefront of our thinking. It became the driving force behind the design. The engineers had the technical solutions [for a low-cost car], and we had to work around them to make the car attractive and modern.
There was a lot of negotiation with the engineers. We tried to make the car modern and solid -- but we had to keep it simple. The moment you introduce a complex design or solution, you open the door to quality problems. We took away that risk of quality problems and waste, which in the end raises the cost of the car.

Q: What were the key design features that helped cut costs?

A: The dashboard for example, is one injection-molded piece. That minimizes the assembly process and ensures consistency. The dashboard on a midsize Western car is composed of many pieces. We weren't allowed to break up the dashboard with colors or special finishes. But we used the radio console to play with a paint finish.

Q: What sets the Logan apart from previous attempts to build a so-called "world car"?

A: Many companies tried to produce a global car on one body style that was designed for their home market. We designed a car for emerging markets from a white sheet of paper. We reduced the cost of design and development by using parts from existing models, such as the Renault Clio and [Renault] Modus and Nissan Micra. And we can ship the tooling to the countries where the Logan is produced.

Q: Where else did you save money?

A: The protective moldings for the body of the car -- the rubber strip over the door -- are the same on the left and right side of the car. In more expensive cars, they're different. So you can use one tool instead of two, and you only have one reference in the factory.

Q: Deutsche Bank's automotive analysts figure if you sell the Logan in its base version without options for $6,000, you are losing $36 per car. But Chairman Louis Schweitzer insists the Logan will generate an operating margin of 5%. How do you resolve that contradiction?

A: The Logan is like McDonald's. It's a low-cost object, and you have to sell high volumes to make a profit. In Russia, India, and Iran, we're after high volumes. That's the only way to cover the initial investment. The profit margin on each vehicle isn't like that on a Porsche.
Besides that, many [buyers] are loading the car with full options, so the average selling price in Eastern Europe is $9,000.

Q: Where else did you save money?

A: Obviously, we kept the production technology as simple as possible. In modern cars, you can apply different decorative films to the interior using a water-bath method, where a film is draped over the false wood or aluminium. It's a high-tech solution. If you go to India, you can't have that kind of technology, so we went for paint.
The challenge is [to make sure] that the supplier network is up to specs -- we have to make sure the quality of the Logan is the same everywhere. Just like the quality of McDonald's.

Q: Some say the exterior of the car looks "old-fashioned" and lacks modern appeal. Did you save money there too?

A: We went for simple shapes -- it's not a sexy car. The windshield is a simple curve. If it's double curved, as in many cars, you get a lot of defects during the production process. The Renault Espace, for example, has a windshield that's very complex to manufacture because you have to stretch hot glass over a huge curved form -- it's not easy.
We used Romanian steel, which is harder to shape than Western steel, so we had to go for simple steel body parts.

Q: Who do you see as the key competition for the Logan? Did you use any particular auto maker as a benchmark?

A: We looked very closely at Tata Motors in India. From a design point of view, they're doing interesting things. They're trying to build more modern-looking cars. The Tata Indigo is a rival, but it's a little more expensive than the Logan.

Q: What was the toughest part of designing the Logan?

A: The most challenging thing for the designers was to swallow our pride -- we want things to look beautiful, or as attractive as possible. At Mercedes, I worked on the design of the SLK and the S-Class. [Letting go of that] was the hardest thing.

[Technocrat]

Saw Logan yesterday in Lonavla they were shooting for Logan's commercial. Very avg looks nothing great. Looks a bit like Ford Ikon. Blant front end.

I saw a wine red colour.

Need to see how the engine is.

[navdeep]

Originally Posted by Technocrat

Saw Logan yesterday in Lonavla they were shooting for Logan's commercial. Very avg looks nothing great. Looks a bit like Ford Ikon. Blant front end.

I saw a wine red colour.

Need to see how the engine is.

any pictures you can share with us...

[abhibh]

If logan becomes famous and their service is good i may drop plan for buying a Swift DDsi for 6.4 lacs...

[Suryam]

Originally Posted by ravradha

Q: Who do you see as the key competition for the Logan? Did you use any particular auto maker as a benchmark?

A: We looked very closely at Tata Motors in India. From a design point of view, they're doing interesting things. They're trying to build more modern-looking cars. The Tata Indigo is a rival, but it's a little more expensive than the Logan.

Atleast a possible rival for Tata-Indigo is coming -- so that Tatas still modernie their IndicXXX range with more features. Finally it would be good for indian consumers.

Originally Posted by ravradha

Q: What was the toughest part of designing the Logan?

A: The most challenging thing for the designers was to swallow our pride -- we want things to look beautiful, or as attractive as possible. At Mercedes, I worked on the design of the SLK and the S-Class. [Letting go of that] was the hardest thing.

So same thing(swallowing pride) seems to be happening for Toyota -- as they also want to compete with Tata's IndiXXX range (which till now are not ventured by saying India is not-mature/no-market/etc reasons)

[navdeep]

Originally Posted by abhibh

Swift DDsi for 6.4 lacs...

in my view swift diesel is quite expensive if priced around 6.4 and not worth spending such an amount.

[danlalan]

Originally Posted by abhibh

If logan becomes famous and their service is good i may drop plan for buying a Swift DDsi for 6.4 lacs...

Steep for a diesel small car..id rather put my money on anything else but the swift ddsi.its just way to expensive for its size here...

[Equus]

Do the Esteem, Indigo, Ikon look good/modern? The low end C segment is all about VFM. I think the Logan should offer that better than most of these plus it would be a fresh looking one too.