Renault has cheated for more than 25 years on pollution tests for diesel and petrol engines with the knowledge of top management, according to a report by French fraud investigators obtained Wednesday by AFP.
"The entire chain of management" up to the French car maker's chief executive Carlos Ghosn was implicated in the "fraudulent strategies", said the report, which led prosecutors to open a probe into Renault in January.
The car maker categorically denied the accusations.
"Renault doesn't cheat," Thierry Bollore, the French company's second-in-command told AFP by telephone, saying all its cars complied with legal standards.
The report said there was no evidence of Ghosn having charged anybody else with approving the company's emissions control decisions, which therefore ultimately came under "his responsibility".
"Many vehicles" were fitted with the device which allowed cars under testing to appear cleaner than they were on the road.
According to the document seen, there was a difference of up to 377 percent between the test levels of emissions performance of some of these cars and the on-road levels.
Renault shares plunge
Police suspect the automobile maker of putting in place the strategies "with the objective of creating false results for antipollution tests", and so to be seen to be complying with European regulations.
The police enquiry is concentrating on the Euro 5 and Euro 6 diesel engines which were approved in 2009.
Renault shares plunged on the Paris stock exchange, closing 3.7 percent lower on a fairly stable market, after the Liberation daily first revealed the existence of the report earlier Wednesday.
The document concentrates on recent car models, but the fraud investigators -- helped by statements by a former Renault employee -- estimate that questionable policies had been in place since 1990.
Several Renault models were fitted with electronic devices which detected test conditions and then triggered a temporary reduction in harmful emissions for long enough to fool the testing equipment, the former employee claimed.
The first generation Renault Clio, which came out in 1990, is believed to be one of the models involved.
The alleged fraudulent practice recalls the "dieselgate" scandal involving Germany's Volkswagen which admitted in late 2015 to installing so-called "defeat devices" into 11 million diesel vehicles worldwide, designed to reduce emissions of harmful nitrogen oxides while the engines were undergoing regulatory tests.
The German automaker last week pleaded guilty to criminal charges in the United States that it committed fraud by installing the devices and paid $4.3 billion in civil fines.
The guilty plea and fines were in addition to $17.5 billion that the company had already agreed to pay in settlements with car owners, dealers and for the environmental cleanup.
The CGT trade union confederation said it feared Renault's image could be "seriously tarnished by these revelation" and called on the company's management to shed light on the matter.
Lawyer Frederik-Karel Canoy said the serious allegations require a swift judicial response and compensation for civil parties, calling for owners of any Renault cars found to have been fitted with the emissions-cheating device to be fully compensated.
France Nature Environnement, which is also interested in a civil case, said the emissions were recognised as cancerous and "directly endanger the health of citizens."
Earlier Wednesday, state prosecutors in southern Germany said they had searched offices belonging to carmaker Audi over parent company Volkswagen's emissions cheating scandal.
Investigators from Bavaria, Baden-Wuerttemberg and Lower Saxony states searched "sites belonging to Audi AG and seven other locations" on suspicion of "fraud and illegal advertising", Munich prosecutors said in a statement.