General Motors-owned Saab Automobile has confirmed reports earlier in the week that it would collaborate with GM affiliate Subaru to introduce a sporty small car it will designate the 9-2.

According to US-based The Car Connection (TCC) website, the hatchback will be based on the Subaru WRX and will feature all-wheel-drive and offer a pair of powertrains: both a normally-aspirated 2.5-litre engine and a turbocharged 2.0-litre four likely to produce somewhere in the vicinity of 300 hp.

Subaru has long-specialised in horizontally-opposed 'boxer' flat-four and flat-six engines so, if these are used in the new Saab sportster as seems likely, this would mean a significant change in drivetrain design for the Swedish company which has made its name with turbocharged in-line fours supplemented more recently by GM Ecotec petrol and Isuzu turbodiesel V6s.

Expect introduction "just over a year" from now, Saab CEO Peter Augustsson told TCC, adding he he expects to sell about 7,000 to 8,000 of the sporty cars a year.

The Car Connection said the pairing might seem surprising, but both Saab and Subaru parent Fuji Heavy Industries are part of General Motors' so-called global alliance.

"This is a great example of GM's partners working together, said the website reported GM vice chairman and 'product czar' Bob Lutz as saying.

Saab's Augustsson also told TCC that the 9-2, which could prove a critical product for the long-struggling Swedish car maker, is likely to be only the first in a series of new products designed to invigorate demand.

Saab's CEO also acknowledged to TheCarConnection that a sport-utility vehicle is a possibility.