Renault Case

Topics: European Union, International trade, Customs Pages: 4 (1499 words) Published: February 23, 2011
Please prepare the case “Renault’s Logan Car: Managing Customs Duties for a Global Product” to be discussed in the next class. The case report is due at the beginning of the next class. Please keep separate copies for purpose of participating in class discussion.

Study Questions:
(1) What are the complexities involved in factoring out the effect of customs and duties in designing the supply network of Logan (i.e., where to build the CKD parts and CBU, and what markets to serve from what sites)?

(2) In general, what are the quantifiable and non-quantifiable factors that one should consider in designing a supply network?

(3) For Logan, what new opportunities were created by Romania entering the European Union in 2007?

(4) One of the benefits of Renault's alliance with Nissan was supposedly the potential of Renault using more of Nissan's parts in their products. What are the factors that you would consider in determining whether a Nissan part should be designed into the Logan?

(5) The emergence of the South African market offers an opportunity for Renault to build CBUs in South Africa. Based on the data from the case, as well as your best assumptions, compare the alternatives for sourcing CKDs and building CBUs to serve the South African market. What are the pros and cons of building CBUs of Logans in South Africa?

There would be a lot of factors that are to be considered while designing a supply network. We can broadly classify then into quantifiable and non-quantifiable factors. Non-quantifiable factors:
a. The Free Trade Agreements (FTA’s) existing between nations would be an uncertain factor and certainly an unquantifiable one. An FTA between nations is considered for regular changes and is looked at with utmost importance from both sides as to not affect the trade imbalances. A supply chain built around an existing FTA would have to face the wrath of it being cancelled, in the form of taxes, import and export sanctions, etc. b. The...
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