More info from the primary source (OP article is a WCF article):
Originally Posted by http://www.imotormag.co.uk/news/227637/bmw_z2_is_a_nogo.html
BMW Z2 is a no-go
Moving the BMW Z4 upmarket to make space for a new baby Z2 sounded great, until we found out it's not going to happen
There will be no BMW Z2 – well not in the next decade anyway! An insider at the German firm quashed our hopes that a smaller, cheaper baby brother to the Z4 was due in the next few years. God damn him.
“Everyone in the motoring media seems to be talking about this car but it’s not on my product plan and that lists the forthcoming models for the next 10 years,” he told us.
Of course, a Z2 could be under consideration but not actually signed off. After all, only those projects which have been given the green light are included on a manufacturer’s product plan.
But our insider said he hadn’t even heard any ‘internal gossip’ about the Z2. “Even if such a car was being discussed, and I’m not aware that it is, there is no way it could be brought into production in the time scale a lot of people are suggesting. It takes far longer than two years to sign-off a car, test it, set up tooling and build the thing.”