Crisis cars are coming of age in Europe

Renault's boxy Logan sedan had rear-view mirrors as an optional extra - or so the joke went after its 2005 launch under the low-cost Dacia brand.

Its similarly cheap replacement, unveiled at the Paris auto show, has chrome dashboard finish and other stylistic flourishes worthy of a mid-market rival. Touch-screen GPS and parking radar feature in all but the simplest versions.

In a brutal auto sales slump, crisis cars are coming of age in Europe, narrowing the gap with mainstream brands in everything from aesthetics to fuel economy.

Low-cost autos are a rare growth area in a depressed industry, posing a challenge to mid-range marques - including their own stablemates as well as competitors.

The differences are becoming more subtle, said Renault saleswoman Chloe Gomez as she showed off Dacia's Lodgy minivan at a Paris showroom near Place de la Republique.

We're getting customers who have plenty of money, she said. They might have owned a (Renault) Scenic, but now they're looking for simplicity, and to save some cash for other things.

Dacia's success echoes a recent survey by Britain's AA motoring association, which found that a sizeable majority of drivers would prefer to do without such extras as heated seats, electric parking brakes and rain-sensing wipers.

RIVALS' RIPOSTE

The back-to-basics trend has lifted other cut-price brands, including Volkswagen's Skoda, General Motors' Chevrolet, Hyundai and affiliate Kia.

It has also put the squeeze on Fiat, Ford, PSA Peugeot Citroen and GM's Opel at a time when their compact cars are being challenged by a wave of new rivals from luxury makers.

Renault's so-called Entry models were an initial flop in target markets such as India and an accidental hit back home. They have since become the French automaker's biggest earner, with profit margins above 6 percent and heading for 9 percent soon, some analysts say.

... contd.

ALSO READ

SC annuls Orissa HC order on iron ore licence to Posco

Reliance Communications Q4 net profit down over 8% in quarter

Diesel price hiked by Re 1 per litre, get ready to pay more for the drive

Outsourcing business in India in danger after $45 mn global ATM fraud hits MasterCard