It looks like BMW will be looking for their third different engine partner for the next generation of the Mini. The engines for the first Mini were co-developed and built in a joint venture with Chrysler while the current second-generation models were whipped up with PSA (parent of Peugeot and Citroën). BMW executive Klaus Draeger has told German media that the company has ended their work with PSA. Apparently PSA was unhappy that the engines were too expensive to build which goes contrary to the original intent of the program: reducing the costs of building small engines.
There have been many reports in recent months of BMW teaming up with Mercedes to use common hardware on the next generation Mini and A/B-class. Now that BMW has ended their relationship with the French company, BMW could either move ahead with Mercedes or just go it alone.

[Source: Motor Authority]

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