In this paper, an entirely novel embranchment of variable flux permanent magnet (PM) machine-switched-flux memory machine (SFMM) is proposed and implemented as integrated-starter-generator (ISG) highly desirable for hybrid electric vehicles (HEVs). The flexible flux controllability of air-gap flux is achieved due to the magnetic susceptibility of AlNiCo PM, where the magnetization levels can be tuned by temporarily imposing a current pulse. Additionally, two novel SFMMs with different topologies equipped with interior- and surface mounted-PM respectively are proposed, which inherit high torque density, sinusoidal back-EMF and less torque ripple, which is extremely attractive for ISG system. The detailed design rules and optimization of the proposed SFMMs are described and accomplished. A time-divisional magnetization control scheme is developed to uniformize the magnetization levels of AlNiCo PMs. The transient and steady electromagnetic performances are analyzed and quantitatively compared by employing the circuit-field-torque time-stepping finite-element-method (TSFEM), which verifies the validity and the advancement of the proposed ISG system.