Case Solution: Reanult's Logan Car

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Case Solution Renault’s Logan Car: Managing Customs and Duties for a Global Production: Amanda Silverman, Prof. Hau Lee (Case: GS-62 Date: 04/29/08) Stanford Graduate School of Business) Topics: International Value Chain, Foreign Trade Related Risks & Trade Barriers

Internationalised Value Chain of Renault Logan Pitesti ROMANIA €489 Million Investment in Production site for Renault Logan CKD Parts
CKD-parts Decree 166: 0% duty rate for ~90% of parts

Moscow, Russia investment of €230 for assembly plant

Duty Free

CBUs 0% duty rate resulting from free trade agreements
By 2006 20,000 Logans exported

Ukraine (free trade agreement)

Export

Morocco 54% stake in Assembly Plant SOMACA: €30 million invested, CAPACITY: 30, 000 Logan per year

Tunisia, Jordan, Egypt (Maghreb and Algeria) (free trade agreement)

Colombia, Envidago assembly plant investment €23mil: Capacity 15,000 by 2010

Export of cars to

Venezuela Ecuador (free trade agreement)

CKD Parts Duty Free Export
Assembly Plants in Brazil, India, Iran Mechanical parts 0% duty rate instead of 30%: Romania = EUmember

Romania now EU Member

CBUs 0% duty rate resulting from free trade agreements

Brazil: Assembly plant: Mechanical
parts

CBUs 0% duty (higher than expected demand form EU countries)

EU Countries, + Croatia & Turkey

The “Custom Consulting Group” is responsible for planning various aspect of the company’s global infrastructure especially logistic and administration required to satisfy customs regulations in the entire supply chain. Moreover they were also responsible for understanding the global customs environment. Inbound and outbound logistics operations and procurement were organized to add value at each step. The home base in Romania produced cars for EU countries, however the automobiles built in a given country could be produced with a range of local content also. A Logan could be exported as a “CBU (completely built-up) vehicle where the importing...
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