'Politically incorrect' Renault on sale in France

8th June 2005, Comments 0 comments

PARIS, June 8 (AFP) - An automobile that officially goes on sale in France this week illustrates the complex economic and political realities that led French voters to reject the European Union constitution in a referendum.

PARIS, June 8 (AFP) - An automobile that officially goes on sale in France this week illustrates the complex economic and political realities that led French voters to reject the European Union constitution in a referendum.  

Many of those who voted against the constitution May 29 expressed concern about the country's stubborn unemployment rate of more than 10 percent, and specifically about the danger of jobs being lost to low-cost competition from the new EU member countries of eastern Europe.  

The new Logan by Renault, a mid-sized, Romanian-built family sedan that retails for about half the price of a similarly-sized car built in France, represents just such a transfer of jobs and technology to the east.  

The Logan will go on sale across France on Thursday for EUR 7,500 (USD 9,200) for the basic model to EUR 8,500 for the high-end version with power steering, onboard computer and air conditioning.  

That is about 50 percent more than its price in its home market, partly explained by the need to fit anti-block brakes and other safety equipment required by legislation in the European Union, which Romania hopes to join in 2007.  

Despite the relatively low cost of the Logan and its lack of sophisticated electronics, Renault insists that the model is a high-quality modern automobile - unlike Communist-era products such as the Russian Zhiguli that was based on an obsolescent Fiat design and came to the West as the Lada with a strongly negative image.  

In fact, the simplicity of the Logan could be a selling point among people who distrust the electronic gizmos on modern autos - particularly since Renault has been having highly publicized problems with the electronic cruise control on some of its Western-built models.   

Paradoxically, the popular newspaper France Soir said the Logan will appeal to people who voted "no" in the referendum out of a distrust of elitism and complexity. Then again, the newspaper said, it could also attract young urban voters unconcerned with status who tended to vote "yes."  

Renault had the task of placating both labour unions that see the new car as a threat to jobs and dealers who might not push the car very hard because of its low profit margin and undemanding after-sales requirements.  

The Logan is being introduced with minimal promotion and no advertising, and press reports estimated Renault would sell no more than 50,000 a year in western Europe, although it plans total annual sales of 750,000 Logans by 2007 from plants in Brazil, Colombia, India, Iran, Morocco and Russia as well as Romania.  

The management has assured unions that the car will not steal sales from Renault's higher end products, but is instead aimed at buyers of modest means who otherwise would buy a used car, and would compete with other low-cost cars made in Asia and eastern Europe.   

But the Logan is also the spearhead of what could be a growing trend in the mature European car markets.   

Germany's Volkswagen has announced plans to introduce a Brazilian-built small car, the Fox, for about EUR 8,000 in western Europe later this year. And other manufacturers are rushing to set up operations in eastern Europe to take advantage of low costs there and a relatively affluent market in western Europe.   

Slovakia, for example, will soon have the highest per capita car production of any country in the world, with major new plants built or being built by France's Peugeot, Volkswagen and the Kia division of Hyundai of South Korea,  

Another irony is that much of the technology under the Logan's sleek body comes from Japanese carmaker Nissan. France once fought tooth and nail to regulate Japanese car sales in the EU's common market. Now Toyota produces cars in northern France and Renault is locked in a symbiotic embrace with Nissan.

© AFP

Subject: French News

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