Here is a brand new one from the rumor mill. is reporting that BMW is working on a small car, about the size of a MINI, to compete with the Audi A1.

>The BMW City is expected to hit the market at the end of 2010, the magazine claimed.

>It will be 3.75 metres long, have front-wheel drive and produce less than 100 grammes of carbon dioxide per kilometre, the report said.

We are filing this strictly under the category Rumor for the time being. Not really sure how well a MINI sized BMW would do, but it could be pretty interesting nonetheless. If it ever happens.

[ BMW working on Mini-based car ]