Renault and UK sports car maker Caterham Group are forming a joint venture to develop sports cars and plan to launch one model each within four years.
The deal will revive Renault's Alpine brand, which ceased production in the 1990s.
Caterham will take a 50 percent stake in the Societe des Automobiles Alpine Caterham (SAAC) venture, which will build the cars at Renault's plant in Dieppe in northern France.
Renault CEO Carlos Ghosn said: "We're talking about several thousand vehicles a year."
Renault employs just over 300 people at the Dieppe facility to assemble sportier versions of the brand's car models.
The vehicles will put racecar engineering within reach of more customers than current Formula One-derived offerings from rivals, Caterham Chairman Tony Fernandes said at a news conference.
"If you look at Formula One, there's only Ferrari and McLaren, which are extremely expensive," Fernandes said. "We'll produce a car that many more people can afford with F1 technology," he said.
Renault sold its Formula One team in 2009-10 but continues to supply engines to four F1 teams including Caterham F1, which raced under the Team Lotus name until last year.
The companies declined to give details of pricing or sales targets.