Logan is an unexpected hit in France

PARIS – Renault totes the Logan as a low-cost car designed for developing countries, but last year its No. 2 sales market was France.

That’s the biggest surprise in the 17-month life of the no-frills Logan. Since it was launched in June 2005, nearly 10,000 French people bought the roomy, three-box family sedan for as little as E7,500.

The best market was Romania with 88,000 sales, but that was for a full year and in the country that builds the Logan.

The French people’s eagerness for the Logan highlights a growing western European appetite for discount goods ranging from food to electronics, analysts say.

“One French person in five is ready to buy a low-cost car,” said Pascal Roussarie, an economist with Cetelem, the consumer credit arm of BNP-Paribas.

After polling 700 consumers last year, Cetelem predicts low-cost cars could capture 5 percent of French sales in a few years.

“The auto industry will go the way of other consumer goods industries,” Roussarie said, although he noted that consumers want to buy cars from established manufacturers and dealers.

Jacques Chauvet, Renault sales manager for France, expects to sell 20,000 Logans this year, keeping pace with the nearly 10,000 units sold in half a year in 2005.

Customers must wait six months if they want a built-to-order car, a Paris dealer said. But if they are less choosy, they can pick from existing stock.

There are several factors that explain the comparative success of the Logan in western Europe, says Ugo Puliese, a researcher at the French university of Evry.

In a paper on the Logan, he cited:

• Stagnant purchasing power and slow economic growth
• Growing lure of other leisure goods such as travel and telecommunications
• Increasingly sophisticated cars, creating a market void below E9,000
• Psychological pull of owning a new rather than used car
• Logan’s unmatched value-for-money equation. Unlike past world cars such as Fiat’s Palio, the Logan is a roomy, medium-size car, even though it uses some small-car components
• Renault’s communication skills, which made the Logan a big media event.

There may be a change in Logan’s huge momentum. It may not go to as many developing countries that former Renault CEO Louis Schweitzer had in mind when he commissioned the car in the late 1990s.

His successor Carlos Ghosn says the lower-medium Megane, de-signed for developed countries, is the most likely Renault car to go to China, for the sake of Renault’s brand image.

“China is much more advanced in its consumer needs than was anticipated,” said a Renault spokesman. “People there want more equipment, and have more money to spend than previously thought.”

This suggests Schweitzer’s sales objectives for the Logan may not be reached. A year ago, he predicted Logan worldwide sales would reach at least 1 million units a year by 2010.

But Schweitzer was counting on 300,000 units a year in China.