Renault must build luxury cars

Over the years, Renault has had well-documented difficulty trying to build and sell upscale vehicles. But a scandal is getting them back in the luxury game, sources told Bloomberg.

Renault's luxury track record isn't good. The Avantime, a luxury minivan that drew puzzled stares in Europe in the early 2000s, was unsuccessful and short-lived. The slightly smaller Vel Satis arrived soon after and did little better.

So Renault has steered clear of prestige vehicles -- to the annoyance of its largest shareholder, the French state. Now the government has convinced the company to get back into the luxury game. It's an outgrowth of Renault's botched internal corporate-espionage investigation that generated international bad press and cost the company's No. 2 executive his job.

Last week Renault named Carlos Tavares second-in-command to CEO Carlos Ghosn. But the government, which owns a 15 percent stake, made support for Tavares' appointment conditional on strategy changes, Bloomberg reported. French authorities also insisted the luxury car be built in France. Ghosn, who also runs Nissan, said he will oversee development of models that are more upscale and make it a priority.

He also agreed to devote more time to Renault, the sources said. Ghosn told the French daily Le Parisien he intends to be "more present in France from now on