BMW is considering developing a new low-emissions minicar to help reduce its fleet average emissions levels in light of new CO2 standards being pushed by the EU. Insiders reveal that initial work for the development of a new model smaller than the Mini is in progress though final production plans are yet to be confirmed.

If given the green light, the new minicar could hit the market by 2010 along with several similar models from rivals Volkswagen and Audi. People close to the project have told the Financial Times that any new super-mini would unlikely be badged as a BMW and would share its platform with the current Mini.

Previous reports suggested that the car would be FWD and measure no more than 3.75m in length. Production would also be outsourced to Magna Steyr but the engines and drivetrain would be built by BMW at plants in Germany.

Pictured above is the Isetta minicar that was produced by Italy’s Iso and sold as a BMW during the 1950s.