Tensions in the Periphery: Dependence and the Trajectory of a Low-Cost Productive Model in the Central and Eastern European Automotive Industry

This article analyzes the low-cost strategy adopted by Renault for its Dacia plant in Romania. After identifying the factors that have contributed to making Central and Eastern Europe into an automotive powerhouse, it proposes a detailed analysis of the conditions for the success of the Logan project—Renault’s radical approach to the concept of the low-cost automobile. We look into both market- and production-related aspects that have made the Logan work and highlight the tensions sparked by Renault’s drive to capitalize on its favorable market situation as well as labor’s success in defending its interests. Finally, we discuss the strategic dilemmas facing management and labor, their possible resolutions, as well as the relevance of the Dacia case for understanding the future of CEE as a peripheral region attracting automotive FDI.