BMW and France's Peugeot Citroen will likely end their partnership on small petrol engines when the project expires in 2016, a person familiar with the matter told the Reuters news agency.

BMW no longer needs the cooperation as the Munich-based manufacturer is developing its own architecture for three, four and six-cylinder engines while Peugeot is fostering ties with General Motors, said the source.

French newspaper Les Echos reported late on Tuesday that the two companies had decided against extending their engine cooperation.

PSA has since announced new plans for small diesels which it currently makes in cooperation with Ford.

BMW chief executive Norbert Reithofer said in July that the cooperation runs through to the end of 2016 and that the automaker would deploy its own small engines in Mini brand cars that are currently fitted with engines jointly built with Peugeot.

Spokesmen for BMW and Peugeot reiterated that the petrol-engine program will continue until 2016. The Peugeot spokesman added there have been no talks yet on what happens after 2016.

BMW and Peugeot agreed in 2002 to develop and assemble as many as 1m small petrol engines. The German company last year quit cooperation with Peugeot to make components for hybrid vehicles, responding to a broader alliance struck between GM and the French manufacturer in February 2012.