The first phase of building the prototype is under way at a BMW site in Munich, Germany. AutoWeek first reported plans for this small car last month (“Mini Minor?” AW June 7, 2010). It would be based on a modified version of an existing front-engine/front-wheel-drive platform boasting a shorter wheelbase. The new small MINI has been conceived as part of BMW's broad-based project “i” mobility initiative, which has also spawned the more high-tech, carbon-fiber-intensive Mega City Vehicle -- a car with which the new MINI shares very little.

Little else is known about the car's layout at this stage, but engineers involved in the development of current Mini models concede it would be very difficult to create a front-engine/front-wheel-drive, four-seat city car shorter than today's 3,700-millimeter-long hatch while adhering to all relevant crash-test criteria, both in Europe and in North America.

This tends to indicate the new MINI will receive a two- seat interior in a move mirroring that of the smart fortwo -- just one of a number of possible rivals. Another possibility is a three-seat configuration like that of the Toyota iQ.

Warning that its future production is anything but secure, MINI officials say they will monitor reaction to the urban concept to be shown in Geneva before making any decisions on production.

“The idea to create a highly compact MINI model is one that has been on the agenda for quite a while,” a source said. “On the outside it would appear a natural fit for the brand, but profitability is a major concern at this end of the market. It's one thing making a good-looking small car, but it's another thing making money on it.”

Although the new MINI and the Mega City Vehicle aim at a similar market segments, the concept of the former, planned for Geneva, is expected to showcase a new small-capacity gasoline engine while the latter is being developed primarily as plug-in electric vehicle, albeit with the likelihood of gasoline and diesel versions in the longer term.

In addition to hinting at MINI's plans for a new small car, the concept car planned for Geneva is set to feature the company's future design lineage, which BMW Group design boss, Adrian Von Hooydonk, describes as being an evolution of the existing retro-infused theme, as seen on today's hatch, Clubman and Countryman.

MINI's plans for a smart fortwo rival date to the company's earlier rear-engine/rear-wheel-drive Spiritual concept cars revealed at the Geneva Motor Show shortly after BMW's purchase of the Rover Group (to which MINI belonged) in 1994.