(September 30, 2010) TROLLHATTAN, Sweden — Saab and BMW AG signed an agreement today for BMW to supply engines for Saab's next-generation 9-3, Automotive News has reported.

Under the agreement, BMW will supply Saab with a four-cylinder 1.6-liter turbocharged gasoline engine starting in 2012.

The engine is currently used in the Mini. The engine will be adapted to meet Saab's specific requirements and is expected to produce 200 horsepower.

The engine will be assembled in BMW's Hams Hall plant in England.  The contract's length and engine volume were not announced but Jonsson said this “is a long-term contract for hundreds of thousands of engines.”

"BMW's engines and their fuel savings innovations are widely regarded as a benchmark in the premium segment," Jonsson said.