Bayerische Motoren Werke AG (BMW) and PSA Peugeot Citroen (UG) will probably end cooperation on small gasoline engines when the project agreement lapses in 2016, a person familiar with the matter said.
BMW, the world’s biggest maker of luxury cars, no longer needs the partnership because the Munich-based company is developing its own engines, while Peugeot is tightening ties with General Motors Co. (GM) in a broader alliance, said the person, who asked not to be named as the talks aren’t public.
The program’s expiration would bring to an end joint work that started in 2002, when BMW and Paris-based Peugeot, Europe’s second-biggest carmaker, agreed to develop and produce as many as 1 million small gasoline engines. They added plans later to make components for hybrid electric-gasoline systems. The hybrid portion unraveled last year after Peugeot and GM started setting up their partnership in early 2012.