BMW development executive Klaus Draeger recently told a German industry publication that cooperation with PSA was effectively ended. This news comes despite plans in late 2006 to evaluate the expansion of joint engine development efforts. Despite the success of the motors spawned by the joint venture, the engines were quite expensive to produce according to PSA boss Christian Streiff.
This summer, Mercedes proposed a closer working relationship with BMW, especially with engine technology. BMW hasn't agreed to the partnership, however, and with the PSA deal now out of the picture, it looks like BMW will be developing the lion's share of future engines on its own.