Renault reportedly withdrawing from the 2014 Smart ForTwo project image

Renault will not contribute to the development of the next Smart ForTwo city car, as it had agreed with Daimler back in 2010.

According to the original alliance deal, the future Smart and Renault Twingo models would share the same platform, similar engines and a common electric drivetrain. Smart was to build the two-seater versions at its plant in Hambach, France, while Renault would make the four-seater versions, including a new Smart ForFour, in Novo Mesto, Slovenia.

Although test mules for both the two-seat and four-seat models have been spotted testing in Europe, a new report says Renault has pulled out of the deal. According to CAR Magazine, Smart now has to develop the new ForTwo and ForFour models on its own. Renault’s move is reportedly related to the massive investments it has made to develop the Twizy and ZOE EVs, which have now emptied its coffers.

Due to Renault’s decision, the release of the new Smart ForTwo will be delayed until early 2014 instead of this year as originally planned. Another effect is that the ForTwo will lose on the fuel economy front, as it will lose the 1.5 dCi engine from Renault. Thus the ForTwo’s footprint will increase from 86 to 99 g/km. Instead of the diesel, Smart will introduce a normally aspirated 0.9-liter three-cylinder petrol engine.

Neither Daimler nor Renault-Nissan has confirmed CAR Magazine’s report.