Four years after ditching Rover, the brand it acquired to supply smaller models, the German company is almost ready to drive into the C-segment with a pace-setting range based on a premium family hatchback.
Due to be launched in September, the 1-series is smaller overall than BMW's current entry-level car, the 3-series Compact.
But it has been designed to be bigger inside to provide more room for passengers and their luggage – and with five doors for greater convenience, it is intended to help tighten the marque's grip in the corporate sector.
Project director Dr Gerd Schuster said: 'It has been a long time coming, but this car is expected to give us a lot more exposure with fleet customers across Europe.'
Speaking as the company showed off prototypes of the newcomer at its Miramas proving grounds near Marseilles in southern France, Schuster told Fleet News: 'We have styled the 1-series to appear bigger than the Compact, even though it is fractionally shorter.
'But the package represents a win-win situation over the Compact because this car is lighter, faster and more economical. We're confident it is a winner and will establish a fresh market niche.'
Company executives invited a handful of British journalists to Miramas to sample its breakthrough model over a route confined to little-used country roads.
It also opened up the high-security proving area to allow us to put the car through its paces in a series of track manoeuvres designed to demonstrate on-the-limit capabilities relating to steering, handling and cornering.
Engineering staff face several weeks of fine-tuning of suspension, damping and steering systems before the project is finally signed off to allow production to get under way at Regensburg, Germany, where the bigger 3-series range is built.
Key decisions also remain to be made over fit and finish, the area that will be crucial to the upmarket positioning of the car, and the final choice of trim and upholstery materials is still to be agreed.
Based on a new platform destined to carry a three-door version in the next two years – and saloon, coupe and convertible models that could eventually wear 2-series badges – the new car reduces unsprung weight with an aluminium front suspension and five-link rear arrangement from the next-generation 3-series, due late this year.
But the initial four engine options and three transmissions are all carried over from its bigger brother and range from 115bhp, 1.6-litre and 150bhp, 2.0-litre petrol engines to 122bhp and 163bhp 2.0-litre turbodiesel units capable of 125mph and 137mph top speeds and average economy of 50.5mpg and 49.5mpg. All are Euro IV compliant.
BMW GB sales director Graham Grieve said: 'Our success with the Z3 and X5 shows that we have been able to establish new individual market segments over the past 10 years and we believe the rear-wheel drive and exciting dynamics of the 1-series will create another opening for us in the C-segment.
'We see this range as having the potential to account for 10% of our annual volumes and we are budgeting to sell 7,500 examples this year and around 22,000 units in 2005.
'This is an important model for us because of the likely number of conquests it will achieve with customers who are looking for more individual transport and are currently choosing the Audi A3 and Alfa 147. The 1-series will attract a younger buyer to BMW.'
In all, the UK corporate market is expected to account for more than 40% of registrations of the new range, which Schuster says has been honed to exude the same driving qualities that underscore more costly BMWs.
Grieve said: 'We have created a market niche between the Mini and the 3-series that takes us into the heart of the C-segment, which is the biggest in the world.
'Our aim is to make a big impact with people wanting more driving involvement at a lower cost.
'Everything about this car is based around that, but it is practical as well.'
Engines are mounted as far back as possible to achieve the classic 50-50 balance between front and rear wheels and though detailed information is yet to be released, Fleet News understands that weights start from around 1,200kg.
The 1-series will also be the world's first volume production car to have run-flat tyres and an on-board monitoring system to alert the driver to low air pressure in punctured tyres, which will be capable of being driven for up to 120 miles at normal road speeds before requiring attention.
Consequently, the battery occupies the underfloor boot compartment that would normally be used by a full-size spare wheel.
Brake lights feature a novel, two-stage warning system to indicate whether brakes are being applied normally or for an emergency stop.
With dynamic stability control, dynamic brake control, an electronic differential lock and head airbags for all seats, company officials are predicting the car will achieve a five-star rating in the Euro NCAP crash test.
Options on the car, which has a push button start and stop control, will include keyless access, Bluetooth mobile interface, sports seating with backrest width adjustment, parking distance control covering the front and rear, bi-xenon headlamps and a choice of audio and navigation systems, all operated centrally or by voice control via the iDrive system.
Behind the wheel
BMW's chassis engineering experts have still to complete their work on the 1-series, but only minor tweaks are required to complete the development of this significant new model.
Needing just three turns to move from one extreme to the other, the hydraulic steering system is quick to respond yet also allows the car to be easily kept on the straight at speed.
Firm damping promotes the classic sporty handling that makes the 1-series a driver's delight and unique in its sector, but a more compliant ride will be a must for the substantially less-than-perfect surfaces of roads in Britain.
Only the most powerful petrol and diesel versions were available for our exercise, but the high output and immense torque of the diesel made it an easy favourite.
According to the rev counter, it pulls a massive 35mph per 1,000 revs in sixth gear, making it superbly relaxed motorway transport. But that's only part of the story: the ratios are well spaced and the fact that the 1-series is 100kg lighter than the Compact makes it feel markedly more lively in general.
The 120d pulls strongly from as low as 1,600 revs and the motor is impressively subdued. Only marginally quieter on idle, the petrol unit emits a delightful, V8-type pulsing sound under hard acceleration, and with closer ratios, this version produces 25 mph per 1,000 revs in top.
Entry to the rear seat is restricted by a high sill and a narrow door aperture, but accommodation is good, with a kinked headlining providing sufficient height for tall occupants.
The car's luggage compartment extends from 330 litres to 1,150 litres with the rear seat folded to provide a flat floor.
Four strap lashes are provided in the rear compartment, which also has a power outlet, and according to my tape measure, the tailgate opening is 83cm wide and the boot sill height is 68cm high.
Even in prototype form, the 1-series has the driving dynamics to match dramatic styling that features a bold lower body line sweeping upward to the rear.
This car clearly outperforms the Compact it is destined to replace over the next two years and poses a threat to higher-end versions of the Golf, Focus and Astra as well as its main target, the A3.
Engines: 1.6 and 2,0-litre petrol, 2.0-litre turbodiesels
Max power: 115-163 bhp
Max torque: 110-250 lb-ft
Combined cons: 38.1-50.4 mpg
0-62mph: 10.8-7.9 secs
Max speed: 124-137 mph
On sale: from September
Prices: from £15,500 (est)