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Monday, September 20, 2004

Romanian Dacia Logan to hit France and Germany

PARIS, Sept 19 (Reuters) - French auto maker Renault (RENA.PA: Quote, Profile, Research) will sell its no-frills "5,000 euro" car designed for emerging markets in western Europe from next year, its chairman said on Sunday.

The Logan, currently produced in Romania, will be sold in France and Germany from June 2005 for around 7,500 euros ($9,135) -- above its 5,000 euro starting price in developing countries, Louis Schweitzer told France's LCI television.

The car would hit showrooms in the rest of western Europe after that.

"It was something that we hadn't initially planned. We had intended to sell it in emerging markets only... but when we unveiled the car there was such intense interest and enthusiasm here that we said why not?" Schweitzer said.

The bargain-basement Logan was made for the tougher road conditions of developing countries, so selling it in western Europe is a bold step at a time when most carmakers are trying to nab market share by luring motorists with myriad gadgets and extra comfort.

Schweitzer said the car would fetch a higher price in western Europe due to transport costs from Romania and different tax rules, adding there would be no discounts or special offers.

Renault hopes the Logan, which is made by its Dacia unit and will be sold in eastern Europe, Russia, Turkey, the Middle East, Latin America, China and possibly India, will account for around a fifth of the company's sales by 2010.

The car is a crucial plank of the Renault's international expansion after years of over-dependence on France and the cut-throat western European market. It is essential if the company is to hit a target of annual sales of four million vehicles by 2010.

Schweitzer has said the profit margins on the Logan should be around five percent -- roughly in line with the firm's average -- and that production will start in Russia, Morocco and Colombia next year, and Iran and probably China after that.

He played down speculation that the Logan would simply steal sales from Renault's entry level Twingo city car, noting the new model, which would be sold in Renault dealerships under the "Dacia by Renault" brand, was bigger and would likely attract a different type of buyer.

Posted by Mihai : 9/20/2004 10:40:00 am