Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code :BSM0036

Year : 2006

Industry : Automobiles

Region : Global

Teaching Note:Not Available

Structured Assignment :Not Available

Introduction:In September 2004, Renault launched Logan the lowest priced car in its history, priced at € 5,000 ($ 6,105). According to sources at Renault, Logan is "The roomiest saloon in the market for its price. It offers all the fundamentals of amodern car, with dynamic features and safety levels up to European standards as well as attractive, appealing design". Renault had put all its technological expertise and know-how to make the best at lowest price. "It's a back-to-basics car incorporating the best of Renault technology", says Renault press release. With a warranty of three years or 100,000 kilometers throughout the European Union, its price/service ratio is one of the highest in the industry.

Logan provides basic featuresminus luxury features which are used rarely but escalate prices disproportionately. It is designed and engineered by Romanian automajor, Dacia, mainly to cater to central and Eastern Europe, Russia, Africa and West Asia, which cannot afford expensive Western Europe cars. After Logan received enthusiastic response from these markets, Renault figured out that customers in Western Europe also preferred a low cost car like Logan. In June 2005, Renault made the Logan available in France, Germany, and Spain at a base price of $9,3007 (€ 8,000), half of the average price tag of its competitors. Between October 2005 and January 2006 Logan will be launched in five other west European countries namely Belgium, Switzerland, the Netherlands, Italy andAustria with ABS (anti –lock braking system), two front airbags and head restraints for all seats as its standard feature.