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What is the key to the Logans low price?

The key of Logans low price is low costs. Logan was designed for emerging markets from a
clean sheet of paper and engineer low costs in. The company reduced the cost of design and
development by using parts from existing models. For example, the ashtrays are exactly the same
as Renault Espace and the engine and gearbox is share with Renault Clio. High manufacturing
volumes of these components translate into economies of scale. The production costs are also
lowered by producing in Romania at where labor rates and taxes are lower.
The risk of quality problems is high when the car has a complex design or solution. Renault took
away that risk of quality problems and waste, which in the end raises the cost of the car by
keeping the Logan design and production technology as simple as possible. There is no cruise
control in the car, and drivers have to switch on the ignition with an old fashioned manual key.
The windshield of Logan is also a simple curve. It is not easy to manufacture a very complex
windshield because it will have to stretch hot glass over a huge curved form and can get a lot of
defects during the production process. Thus, Logan has nearly flat windshield glasses, which
make it easy and less expensive to product. The protective moldings of the body of Logan the
rubber strip over the door, and the outside mirrors are the same on the left and right side of the
car. The company can to use one tool instead of two and only have one reference in the factory
when the parts are identical and reduce the cost of production. Another key design features that
helped reduce costs is the dashboard. The dashboard is one injection-molded piece. This
minimized the assembly process and ensures consistency.

What are the environmental implications of millions of middle-class consumers in emerging
markets buying their first automobile?
The environmental implication of increase in the number of new vehicles is significant because it
is a major user of energy and burns most of the worlds petroleum. Burning of the petroleum
generate carbon dioxide and since there is no practical filter for carbon dioxide, all emissions end
up in the environment and are a significant contributor to global warming and air pollution. The
high temperatures of automobile internal combustion engines also generate nitrogen oxides and
lead to nitric acid formations when reacting with hydroxyl radicals in the air. The nitric and
sulfuric acids are the two majors components of acid rain. Although the new technology in the
automobile has reduced the emissions of carbon dioxide, this can be offset by the increase of
new vehicle in emerging markets.
Other environmental implications include traffic congestion and automobile-oriented urban
sprawl, which can consume natural habitat and agricultural lands. The environment loses green
spaces and public squares to highways and parking lots. The latter affect a city's microclimate.
Asphalt absorbs solar energy, raising already uncomfortable summer temperatures in urban
centers. Vehicles also affect the environment by creating noise; road traffic is the most important
single source of community noise in urban environments. Noise can cause disturbance to work,
relaxation and sleep, mental stress and some other physical problems. Vehicles also affect water
quality because oil and particles get washed into creeks and rivers. In urban environments, run-
off from roads goes into storm water drains and then feed into rivers, which eventually goes into
the sea. Oil is a harmful water pollutant and can be toxic to aquatic life and smother plants and
animals.

Do you think Tata will be able to save the Nano? What steps should the company take?
Tata introduce Nano at the price of $2500 and target market in the consumers in emerging
markets who currently travel by scooter. The chairman of the company thinks that low income
families should also be given access to the freedom that a car provides. However, very few
people wanted to be seen driving the worlds cheapest car. Scooter drivers werent attracted to
Nano because they think that theyre buying something between a two-wheeler and a car instead
of a car. Anyone who had a car didnt want to buy it, because it was supposed to be a two-
wheeler replacement. Thus, in my opinion, it is important to change the current image of Nano as
a cheap car. Instead of selling solely on price, Nano must be more aspirational. Tata will have to
change the exterior and interior of the Nano and add features such as power steering to compete
with cars from Maruti Suzuki. The pricing strategy of Nano should be changed as well;
promotions can be preferred rather than just low price. And of course, while increasing prices,
the quality and services should be improved as well. Tata can consider offer an extended
warranty and monthly maintenance contracts with a promotional price. Moreover, the company
should implement strong marketing actions and re-designing marketing structure to save the
Nano image. New advertising campaign on television and outdoor should be launched to boost
awareness, particularly in the tier II and tier III towns.