Baby Beemer

That will be tested when the German company launches its new, small 1-Series five-door hatch in September.

The starting point for BMW cars was $43,869 for the Compact 3-Series three door which had limited appeal in this country.

But at under 40 grand (for 118i), the Corolla-size 1-Series has much better prospects, particularly as it is built on the 3-Series production line in Regensburg, Germany, using the 3-series platform as a base and the same engines.

The model kicks off in Australia with the 120i – using a 2.0-litre, 110kW, four cylinder petrol engine. A lower-priced 118i – with a 1.8-litre petrol four arrives early next year.

The 2.0-litre engine features variable valve timing and balancer shafts to improve performance. It is mounted longitudinally in the 1-Series engine compart- ment.

The 1-Series has a number of appealing features not the least being its rear wheel drive layout – all other cars in this segment are either front wheel drive or in high range models, all wheel drive.

As well as a strong point of difference, rear drive gives the 1-Series a superior feel to other small cars with a total absence of torque steer (unexpected steering effect under power).

Two six speed transmissions will be offered on the 120i in manual and steptronic (sequential) auto. The 118i will have a five speed manual and six speed auto.

As expected, the 1-Series passes the Euro NCAP crash test with a five star rating.

Various chassis components are aluminium includ- ing the front suspension. Like all other BMWs sold here, the 1-Series boasts an arsenal of electronic control systems to improve dynamics and boost safety.

Numbered among these are ABS, Dynamic Stability Control, Cornering Brake Control and plenty more.

The car has a 50/50 weight bias to optimise handling and ride.

Styling has clear links to other cars in the BMW range – 3-Series headlights, concave side panels from the Z4.

It has a chiselled look to the body with style lines to accentuate its shape and make it stand out. Of particular note is the so-called "banana line" along the bottom edge of the doors – something not seen before.

The interior is typical BMW sharing general layout and controls with other models in the range. It is neat, functional and aesthetic.

No "space miracle" inside, the 1-Series will accommodate five at a pinch or four in relative comfort. Rear seat legroom is tight with medium size front passengers and the boot is a good size.

We were able to drive the new 120i at the international launch in Munich last week and liked what we saw. The car has excellent dynamics and a sporty feel coupled with an engine not afraid to rev.

The six speed manual transmission has short throws between gears and all the controls have a firm, typically BMW feel.

No autos were available for test.

Engine performance is acceptable from the 2.0-litre petrol but the diesel 2.0-litre, not coming here, is the real goer in the range.

A rash of new high tech diesels is flooding Europe offering superior performance, economy and lower emissions than petrol engines.European carmakers are investing heavily in new diesel technology.

Also prevailing in Europe are either run-flat tyres or space saver spares. The new 1-Series has the latter and no spare.

Ignition is by push button after key insertion and a service indicator does away with under bonnet checks such as the oil dipstick.

An extensive range of options is available with the 1-Series including items like i-drive and satellite navigation.

Standard equipment is extensive and of high quality.The 1-Series will compete in the premium small car segment with Audi A3, Alfa 147 and VW Bora. Mercedes-Benz has no direct competitor.