An R-Class style MPV does not fit BMW's image and will not be produced, according to CEO Norbert Reithofer. The announcement was made as part of BMW's unveiling of its 10-year business strategy. Instead of building upon its previously reported Space Functional concept, BMW will produce a car that will forge an entirely new segment - the Progressive Activity Sedan.

The Space Functional concept was originally conceived as a competitor to Mercedes-Benz's R-class. However, BMW's decision not to produce the van may have been influenced by the relative failure of the R-class. Mercedes has already had to reduce the price and add incentives to move the vehicle off of dealer lots. Despite these efforts, the vehicle has yet to sell more than 7,000 units this year, reports Automotive News.

A camouflaged BMW prototype sedan has been spotted on the streets of Munich sporting a sloped rear roof segment, which you can read about in our previous story. It is believed that this is an early example of the upcoming Progressive Activity Sedan.