M2 Gran Coupe, and a hotter 1 Series are also planned.

BMW had promised to keep the rear-wheel drive layout from the 2 Series coupe for its next generation nearly three years ago. Although it’s great to hear, this creates confusion in the company’s lineup as the next generation 2 Series Active Tourer will again be FWD-based much like the newly launched 2 Series Gran Coupe. A new report by Autocar sheds light on the company’s compact cars, especially the performance models.

The M2, which bears the “G87 codename”, will be once again the crown jewel of BMW’s small cars family. It is expected to use a tuned version of the engine that powers the X3 and X4 M, as well as the M3 and the M4. According to the “S58” twin-turbo, 3.0-liter inline-6 engine, it will produce at least 420 horsepower and 406 pounds-feet (550 Newton meters) of torque. This should provide similar performance to today’s car, despite its larger footprint. The car should reach speeds of 0-60 mph (0-100 km/h), in a time of less than four seconds, and peak at almost 175 mph (282 km/h).

The BMW CLAR platform will be used by the M2, which is similar to the Z4 roadster, and the Toyota Supra coupe. This could allow for a mild-hybrid setup in the future. Customers can choose from either a 6-speed manual transmission or an 8-speed torque-converter auto transmission that sends power only to the rear axle. xDrive is not planned.

Autocar claims BMW will have the new M2 available in the U.K. in 2022. The rest of Europe and the U.S. should also get it. The M2 is expected to last seven years. If electrification is on the agenda, the mild-hybrid M2 could be available for mid-cycle updates scheduled for 2025 or 2026.

Although it was just a few months ago that BMW banned full fat M models built on a front-wheel drive platform, this new report suggests that the Bavarians are currently planning an M2 Gran Coupe. The new M2 Gran Coupe is expected to be equipped with an xDrive layout, and to have 400 horsepower to compete against the next-generation Audi RS3 Sedan. This would be a significant power increase over the M235i Gran Coupe’s 301-hp and provide enough power to compete with the Mercedes-AMG CLA 45.

A similar hardware arrangement is allegedly being planned for a hotter 1 Series, positioned above M135i to challenge the upcoming Audi RS3 Sportback as well as the Mercedes-AMG A45 / A45S. Hardcore fans consider “M1” or “1M too expensive to use on a car with front-wheel-drive origins.