Renault has unveiled the Logan, Europe’s first 5,000 Euro car.

Initially intended only for developing markets in western Europe, the Logan has been developed for Romanian car maker, Dacia, which was bought by Renault in 1999.

In production later this year and on sale for a mere 5,000 Euros (£3,330), the Logan is projected to sell 700,000 units by 2010.

Chairman and Chief Executive Officer Louis Schweitzer said: “In 1995, to ensure Renault’s profitable growth, I took the decision to expand the company to markets outside Europe.” The Logan has been developed to honour that commitment.

The car itself is a simple three-box saloon, with best-in-class price/space ratio, five full-size seats and a very large boot. It has been designed with robustness and reliability in mind, and will be powered by Renault’s 1.4 and 1.6-litre petrol engines, which have proved reliable and inexpensive to run.

Other body styles are likely to be added later, and the car may be sold in some markets under the Renault brand.

The car will be built at plants in Romania, Russia, Morocco, Colombia and Iran.