Renault Suspends Luxury Car Project with Daimler

Renault SA has backed off from a plan to produce a €50,000 large luxury sedans with Daimler AG's assistance, The Wall Street Journal reports.

COO Carlos Tavares tells the newspaper that the company plans to focus instead on developing upscale variants of some of its existing model lineup to sell under a new "Initial Paris" sub-brand.

Daimler agreed in 2010 to share the expertise of its Mercedes-Benz car brand to help Renault develop luxury cars. The French carmaker wanted to base its sedan on the Mercedes E-Class platform, according to Tavares. But he says Renault was unable to make a business case because of unspecified assembly, logistics and sourcing issues.

The newspaper adds, citing an unidentified Renault source, that Daimler was offering the company components from its current-generation E-Class, which will be outdated by the time Renault could use it.

Tavares says the luxury sedan decision doesn't affect other projects involving Renault, alliance partner Nissan and Daimler. The three are cooperating on engines, powertrain technology and other vehicles, including a premium compact vehicle for Nissan's Infiniti brand due in Europe in 2015.

Renault currently builds light commercial vehicles for Daimler in France.