PRAGUE, Czech Republic -- Renault is challenging Skoda's dominance in booming central European auto markets with the low-priced, Romanian-built Dacia Logan.
Renault's bold strategy is most obvious in Skoda's Czech home market, where the Logan went on sale this month for E6,361 -- nearly E3,000 less than a comparable Skoda Fabia Classic sedan.
The base-model Logan not only is cheaper, it is also longer, wider, taller and more powerful than the base Fabia sedan, priced at 292,900 koruny (currently E9,320).
Billboard slogans for the Logan are "Focused on price" and "Focused on room."
But Dacia's real focus is targeting potential buyers of the Skoda Fabia sedan, said Dacia salesman David Dolezel at Auto Freiberg in Prague.
Dacia and Skoda are both venerable central and eastern European automakers. Skoda has a significant lead because it has been part of the Volkswagen group eight years longer than Renault has owned Romanian automaker Dacia.
That shows in Czech sales in the first nine months of this year. Skoda sold 33,672 Fabia sedans, hatchbacks and station wagons in its home market. Limited to only the aging and now-discontinued Solenza, Dacia sold just 328 cars.
But starting this month, Czech shoppers can directly compare two automakers' approaches to low-end vehicles.
Skoda builds a simpler version of the highly engineered western European-standard VW Polo.
Renault designed the Logan as a basic, roomy sedan for developing markets. It is meant to be built in low-wage countries.
Skoda is the best-selling brand in central Europe, capturing 15.5 percent of the region's 732,012 sales during the first nine months. The Logan's French design is new for Dacia, which has sold outdated designs with old technology in recent years. Dacia has marketed cars in the Czech market for 32 years, but its reputation is for cheap, low-quality cars.
Dacia salesman Dolezel said potential Logan buyers are not deterred by that reputation. "Customers know the Renault connection and that this is a completely new vehicle," he said.
Not surprisingly, Skoda dealers disagree.
"The Logan is cheaper, but there is still a question of what people are willing to trust and not trust," said Dusan Dudek, head of Auto Tukas in Prague, which sells Skodas and Volkswagens. "A lot will depend on the changes in the dealer network and we have about 230 Skoda dealers in the Czech Republic."
Until the end of 2003, Dacia models were sold through a network of 23 small dealers. Renault has since replaced most of those dealers and has 18 outlets that meet Renault's stricter standards.
In the Czech Republic, Renault keeps the Dacia brand completely separate from Renault, even though there is considerable overlap in dealer ownership and locations.
"The customer must enter showrooms through separate entrances," said Miloslav Diblik, head of Logan sales at Renault's Czech subsidiary. "The two brands will never be side-by-side."
For example, Auto Freiberg has separate Renault and Dacia showrooms at the same site. They share the service facilities at the Renault site.
The Renault connection
The separation also applies to products. The Logan has no Renault reference on the exterior, although if the hood is opened, the Renault label is visible on the engine.
The only reference on Dacia's Internet site is a "Groupe Renault" tagline under the Dacia name. There are no cross links between Dacia and Renault websites.
The price differential between the Logan and Fabia varies. The Logan is also on sale in Romania, Croatia and Hungary. In Hungary, the price in euros is E7,138 for the Logan and E11,313 for the Fabia Classic sedan.
The Logan's price advantage will be less in Poland, where Skoda has slashed prices for the Fabia Classic sedan to E8,473 to boost its market share.
When the Logan goes on sale in Poland in February, its base price will be E7,004, says Poland's SAMAR Automotive Research Institute.