Survival is a strong motive for action, as it was for the new Compact hatchback version of BMW’s E36 3-Series. It’s really quite simple, to survive as a carmaker you have to grow. The bigger you are the better your chances of staying in business, and BMW as a small to medium sized car company in world terms had no option but to make their cars more affordable so more people could buy them.

The risk if they didn’t was to be swallowed up by one of the big players, like Ford or General Motors who were out to add to their portfolio of models.

BMW was in the envious position of being an aspirational brand, one people wanted to park in their driveways even if the range was out of their reach.

The 3-Series was the people’s BMW, but even that became a stretch for most people as its price rose. The 3-Series now is a real aspirational model in the range, and more affordable models have been introduced below it.

BMW’s first move to make their cars accessible to more people was the 3-Series Compact introduced in 1995.

Model watch

It’s most unlikely that BMW will ever offer a model in the sub-$30,000 price range, that would sully the image of the brand as an aspiration purchase.

That’s the trick for a company like BMW. You want more people to buy your cars because volume makes for more profit, but you can’t afford to have too many cars out there because that could damage your brand image.

The 3-Series Compact was the company’s first, careful step in making a car that had a more affordable sticker while retaining the appeal of the marque.

One look at the Compact and you can see the strategy. Viewed from the front it looks for all the world like a regular 3-Series, there’s the same kidney grille, the same bonnet, the same front guards and bumper, and most importantly the same blue and white spinner badge. Clearly a BMW. But viewed from the side or the rear and it was all new with its tail shortened into a hatchback.

The shortened tail made no difference to those who wanted to park a BMW in their driveway, it looked like a 3-Series, had the badge, and the shortened tail was even attractive to most people on seeing it for the first time.

What mattered most was that it was priced below $40,000 and that opened the door to BMW ownership for more people.

Parked alongside its sedan brother the Compact was 233 mm shorter despite sitting on the same 2700 mm wheelbase. That meant the interior was roomy for front seat passengers, if not quite so roomy for those in the rear seat.

The hatch arrangement resulted in quite a large boot space, which in combination with the 50/50 split-fold rear seat delivered a flexibility perfect for carrying just about anything you needed to move.

Under the skin the hatchback was all BMW. A 75 kW 1.6-litre single overhead camshaft fuel-injected four-cylinder endowed it with modest, but adequate performance.

There was a choice of five-speed manual or four-speed auto, the latter dulling the performance somewhat, but a popular choice with buyers none the less.

The suspension was a familiar combination of MacPherson Strut at the front and semi-trailing arm independent at the rear.

It rode and handled well, and with ABS-assisted disc brakes front and rear, it also stopped well.

At launch there was just the single model offering, with standard air-conditioning, central locking, power steering, power windows and mirrors and AM/FM radio cassette sound.

Remote central locking, rear head rests and traction control were added to the list of standard features early in 1996 when it was renamed the Hatchback.

The Contour was added in January 1996, and brought with it standard alloy wheels, metallic paint, leather steering wheel and fog lamps.

In the shop

The BMW badge is enough for some people to stretch their budget to buy it without considering the costs of service and servicing a prestige car can be more expensive than other cars. The result can be compromised servicing, so check for a service record, one that hopefully has a history of servicing by a BMW dealer or acknowledged specialist.

Look specifically for things like regular oil changes, annual coolant changes, and annual brake fluid changes, all of which keep the BMW ticking along as it should.

Brakes tend to need replacement at intervals of 50,000 km or so and original equipment BMW rotors are expensive. Aftermarket rotors are available which will do the job, but you won’t find these on offer at BMW dealers.

Lift the oil filler cap and observe any sludge, a sure killer of engines, and a sign that the oil hasn’t been changed.

The 1.6-litre M43 engine has a timing chain as do most modern BMW engines so there’s no requirement for servicing in that area.

Generally the 3-Series is a well built and robust vehicle that will do quite high mileages without too much trouble.

In a crash

The Compact had dual front air bags standard, and was given front side airbags in 1998, which provided an impressive secondary crash protection system, over and above the primary protection afforded by ABS and traction control.

The E36 rated better than average for occupant protection in the 2004 Used Car Safety Survey, and average for its impact on the occupants of cars it hit.

Look for

• Prestige of BMW badge

• good resale value

• cute hatchback styling

• flexible boot space

• good ride and handling

• good crash protection

• modest performance from 1.6-litre engine

• service records a must

The bottom line

Stylish and practical hatchback for the young or young at heart that comes with a BMW badge.