James Franey
Automotive News

MUNICH -- BMW has killed plans to make the van-like Space Functional Concept.

Speaking at the unveiling of the German automaker’s 10-year business strategy, CEO Norbert Reithofer said “we decided it does not fit BMW’s image.”

“This is something the board discussed a lot over the last 12 months,” he told reporters at BMW’s headquarters in Munich on Thursday.

Instead, the German automaker will produce what it calls a Progressive Activity Sedan.

Reithofer said the car would create “an entirely new segment” but still retain “all the functionality of an MPV.”

Photographs taken of a camouflaged BMW prototype on the streets of Munich show a four-door sedan with a steeply slopped rear roof, similar in shape and angle to the X6 concept. That concept debuted last month at the IAA in Frankfurt.

BMW originally announced plans to make the Space-Functional Concept during the 2005 Geneva auto show. The car was expected to challenge the Mercedes-Benz R class starting in 2008.

BMW’s decision not to make the van comes as Mercedes continues to seek ways to sell the R class. That vehicle was introduced in 2006 amid much fanfare, but Mercedes has been forced to reduce the car’s price and add sales incentives to stimulate sales. In Germany, an equipment package worth 2,890 euros is being offered to lure buyers to the R class.

Mercedes sold just 6,939 R class units Europe wide in the first seven months of 2007, according to JATO Dynamics. Even so, that is a 7.8 increase from the same period the previous year.

Copyright 2007 Automotive News