BMW has said "non, merci" to continuing its diesel engine partnership with PSA Peugeot Citroen. The two automakers began working together two years ago to create 1.4- and 1.6-liter gasoline engines for BMW's MINI and PSA cars. Despite both companies at the end of last year looking at expanding their joint research into a high-tech engine, the synergies weren't providing the cost benefits desired with the small engine, so the affair has come to an end.
BMW has had a few partners when it came to small engines -- just before joining up with Peugeot, DaimlerChrysler was building MINI engines in Brazil. Mercedes recently broached the idea of working with BMW on a frugal, low-emissions motor, a public offer that has gone unanswered by BMW. Nevertheless, with the large number of B-segment cars in development by numerous manufacturers, it would seem likely that people are going to be partnering up again sooner or later.
[Source: Motor Authority]