BMW's 5 Series ActiveHybrid concept could go into full-scale production as early as next year, and the German automaker expects to introduce the dual-powertrain technology into its smaller 3 Series, chief executive Norbert Reithofer told shareholders at BMW's annual general meeting in Munich.

This would be BMW's second full hybrid after the BMW ActiveHybrid X6 launched at the end of last year.

As emission standards become stricter in coming years, BMW will look to lower the carbon footprint of its fleet. Brussels is targeting an overall level of about 95 grams of carbon dioxide by 2020 for new cars sold in Europe. At the end of last year, BMW's European fleet emissions were about 150 grams of carbon dioxide per kilometer, down from 156g at the end of 2008.

Like the Toyota Prius, the 5 Series hybrid can be driven entirely in electric mode after the saloon's brakes recuperate enough kinetic energy initially generated by its petrol engine.

Reithofer pointed to government incentives for hybrids as a key driver of demand, particularly in Japan. He noted that sales of hybrid vehicles in Japan have "skyrocketed," and added that carmakers that don't have a hybrid in their portfolio might not be selling any cars in Japan at all.