Renault Cancels Project on Mercedes-Based Flagship Sedan image

Renault will no longer collaborate with Mercedes-Benz to develop an upscale, rear-wheel drive sedan for the French car maker.

Renault announced it has stopped working on the study for a sedan which was to be based on the Mercedes E class platform, arguing that the “business collaboration was not favorable to Renault,” according to a company spokesman. Since Renault ended production of the low-selling Vel Satis in 2009, it has been looking to develop a profitable flagship model.

According to a report published by the Wall Street Journal, the French automaker ended the project because Mercedes was offering components from its current E class, a model which will be close to the end of its life when Renault would start manufacturing its own model. Renault’s spokesman didn’t comment about this report, but said that Renault’s partnerships with Daimler remain in place.

“There have been many flops among automakers launching luxury models,” said Gaetan Toulemonde, a Deutsche Bank analyst. “Given the risks, you need to tie up with someone else. If Renault can’t tie up with Daimler, then it will very likely seek another partner to reinvent itself in the high-end segment.”