By Hendrik Varnholt

BMW AG will launch its premium compact five-seat Two Series Active Tourer in Europe on Sept. 27, followed soon by an additional seven-seat version.

The company expects to generate about 40% of sales for the five-seat front-wheel-drive model in Europe, and 15% in China.

To date, BMW models were equipped with rear-wheel or four-wheel drive. The shift to front-wheel drive will permit the same parts to be used for its Mini models and BMW models, creating cost savings of scale. The move will also reduce the amount of time the company needs to bring out new models by a year or more, BMW said.

BMW product manager Jochen Schmalhoz, speaking at a press briefing, said the company is planning a seven-seat version of the model in the "not too distant future."

"By expanding its product range, the Group is looking to attract new customer groups to the virtues of the BMW brand, just as it has already done with its successful BMW 1 Series," the company said in a statement.

About 70% of the first-generation BMW 1 Series cars were sold to customers new to the brand, it added.

Write to By Hendrik Varnholt at hendrik.varnholt@wsj.com

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