Sunday, January 31, 2010

Brand Update : Logan

It is sad to see a good product struggling in the market because of a messed up strategy by the brand owner. Logan is a brand which failed to realize its true potential because of a flawed strategy by Renault. Logan also is an example that shows how marketing is intimately blended with corporate strategy.

I was reading reviews about Logan in many magazines. All reviews unanimously praised the car on all parameters except the looks. At a price range of Rs 5,00,000 to Rs 7,00,000, the brand offered unmatched value for money for the consumers. But despite every thing going good for this brand, Logan is no where in the Indian market. Recently there were rumors about the brand being withdrawn .

What went wrong ?

The strategy ...

Renault bought this brand through a JV with Mahindra & Mahindra. JV is supposed to be the best market - entry strategy when entering into a new international market. The local partner is expected to give insights into the market and also the distribution reach. But history has shown that JVs in the Indian automobile industry has not always been successful ( Hero Honda being an exception). The success of JV is depended on the mutual trust, respect, clarity of roles of the partners etc.

Renault - Mahindra JV began to face issues within a short time mainly due to the policies adopted by Renault. Renault announced a series of JV with Bajaj f0r the small car and initiated talks with other players which upset M&M. Is it common sense to have different JVs with different players for different type of cars in the same industry/market ???

When you have a JV with a player who has similar product , can you be sure that your product will get the same level of attention ? Mahindra's focus will be towards Scorpio and Logan will always be get a step motherly treatment in the dealerships. That is happening with most of the such JVs including Tata Fiat JV. ( I am sorry to generalize but many of my friends talk about the lack of interest shown by the dealers in pushing such step son brands).

Renault did a big mistake in its blind pursuit of growth through multiple JVs in the same industry. If Renault was serious about Logan, it would have built its own network of dealers and service centers even though it would take a couple of years to create such a network. But Renault chose the easy way and it flopped. After three years, Logan is not a brand to reckon with but a brand whose future is a question mark ?

Renault should have learned a lesson from Skoda India. Skoda which is a highly successful brand in India took time to develop its own sales and service network in a slow and steady manner. It is now giving the brand unmatched reach and success in India market.

Logan also had a marketing issue. The brand was never promoted aggressively. There was little or no promotions except some bland discount ads by the local dealers. The brand was not built after the initial launch phase. The lack of customer- pull added by the lack of dealer-push made sure that Logan remained in the dealership rather than at the consumer's garage. The news about rocky JV also ensured that potential consumers steer clear of the brand because of worry about future service.

If Logan fails, it is going to be a sad story of a good product killed by a flawed corporate strategy.

Related Brand


  1. The multiple JV's were something that really didn't make sense. The other thing was that the Logan was used by a lot of cab companies. This gave me an image similar to Tata Indica - primarily a taxi.

    Renault should have launched a totally dis-similar model for the cab segment. But I guess, they got caught in their own 'smartness'

  2. Aathira10:33 PM

    Also what is important for a brand from a user prospective is its association. Logaan failed to creat such an image in Indian consumers. Also I feal the sales tie with Cabs accorss India also has given the vehical a Cab image which makes the association not a appealing one. Ofcos if one owns a car at a 6 lakh price point , will not preffer that to be associatesd with that of a Cab. Well this is one the points

  3. The other great exception from a JV failure is Maruti Suzuki.

  4. JVs are becoming more failure.. I heard rumours about Daimler Hero parting ways after they set up a big facility in Chennai outskirts..

    And other reason to for Logan to fail is.. it is perceived now as a Taxi. There are 100s of Logan Taxis you can see on Chennai roads..

  5. Only ineffective JV was the reason for the failure of Logan or because of some other factors. I have read in Business standard that it's length was also the reason.

    Recently Renault has restructured the agreement with M&M for the distribution of Logan. I think this step may help Renault to gain the market share.............


Your Views are Important. Please share your views as comments.