I FEEL sorry for you all. I'm afraid your job as fleet manager has just got a lot harder, with more office politics, back-biting and bitchiness. Go and pre-empt this impending storm of workplace trauma and ask for a raise now, because you're going to need it.

I've lost count of the number of fleet managers I have spoken to over the years who recount the horror of employees trying to wheedle their way into a BMW 3-series. There's the whining and whingeing about how 'so and so's got one and yet my third quarter results were 3.75% year-on-year higher than his' and the accusations that he must be sleeping with the boss to have got a 318i.

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There used to be an oasis of calm below those junior executive sharks. Give those employees lower down the rung a mid-spec Volkswagen Golf, Ford Focus or Vauxhall Astra and they would contentedly wander off, keys in hand. But now they will become monsters because, with a bit of a stretch, these employees might just be able to get into a low-end BMW 1-series, if they nag, argue and dispute enough.

Discounting the half-hearted 3-series Compact, the BMW 1-series is the company's first proper foray into the hatchback sector – and it's gone at it with all guns blazing. There are no corners cut and no cheap solutions in the name of expediency. This is fundamental BMW engineering through and through. In many ways, BMW is answering a question that has never been asked by making its hatchback the first rear-wheel drive car in the sector, as nobody has ever complained about the handling of front-wheel drive cars like the Ford Focus. But it is taking great care to ensure that the cheap end of its range continues with the same values as the dearer stuff (rear wheels pushing it forward, high standards of interior quality and so on). Unlike, say, Jaguar with its Mondeo-derived X-type and its front-wheel drive and cheap plastics or Mercedes-Benz with the awful Vaneo and largely-forgotten A-class.

Internally, the 1-series is premium quality. The plastics and other materials are the equal of the 5-series and recent X3. There's nothing much to suggest, as in the new Golf, that an accountant has been round here trimming off costs.

So it's time – as it always is with BMW launches these days – to discuss its controversial looks. There's certainly a process of assimilation to the shape that runs through each unveiling of a BMW and the 1-series event is no different.

First impressions are that in the metal it doesn't look half as bad as it does in the pictures (where it looks weedy at the back, has an oddly low bonnet and oversized headlights).

With the 5-series and Z4, there was a fairly rapid adjustment to actually liking them but the 1-series is likely to be more gradual. Despite the flaming modernist surfaces and fussy styling, the 1-series is essentially old-fashioned in terms of proportion.

It's like hatchbacks of old, with a long low bonnet and the cab set back, whereas cars nowadays are often chunkily-bonneted and cab-forward. I could never love the look of the 1-series but I could bear it.

I'm not sure regular rear passengers would be so kind. The back seats are verging on a token effort (three average-size men in the back is a little too intimate unless you're really close friends) and the boot has as much volume as the average supermini, but that has to be put in context.

BMW is confident practicality comes pretty far enough down the list to not really influence the majority of buying decisions and I think that's right.

This car is going to be bought for the badge, brand and driving experience. Buyers wanting practicality can shop elsewhere for a stain-proof, wipe-clean mini-MPV.

Around 45% of all 1-series will be corporate purchases, BMW claims, with 50% of all cars diesel, and at launch there are four models: 115bhp 116i, 150bhp 120i, 122bhp 118d and 163bhp 120d.

There are 5,000 cars bound for the UK this year but getting hold of one now is going to prove a tough task as most have already been accounted for, while in a full year the UK has been apportioned 17,000. The 116i and 120d should each take a third of total sales.

This car will be a dream for contract hire companies. Alongside predictable servicing costs, thanks to the Service Inclusive package, it has strong predicted residuals. At around 50% for all models, it kicks sand in the face of the Audi A3, which manages around 43%.

It's not a cheap car, as you would expect, but because it loses value so slowly it puts it back on a level with its only real premium competition, the Audi A3, which is marginally cheaper at the front end.

Behind the wheel

The engine is mounted way back in the engine bay to keep weight as evenly spread over front and rear wheels as possible, and it means there is plenty of space for some spankingly powerful straight six motors in the future (M1? Yes, please).

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It also has the effect of pushing the gearlever slightly further back than is entirely comfortable and the stick is close to the i-Drive, should that option be specified. Should your passenger be fiddling with the dial, things can all get a bit too touchy-feely.

I reckon BMW could make a sofa handle like a sports car and, not surprisingly, the firm's uncanny ability to make anything handle extends to this car. It grips tenaciously and is stable both in high-speed corners and in a straight line on the motorway.

But the feeling of the rear wheels driving you forward is not especially strong, which is as much to do with the levels of grip and the fact that the steering, although sharp and accurate beyond reproach, isn't especially communicative.

In a 3-series with the right tyres, the steering wheel gently nudges left and right in your hands as it encounters fluctuations in the road surface. In the 1-series, that is masked but this is still a great driver's car.

The 1-series has run-flat tyres and for the first time, they don't destroy the ride. Because of the stiff sidewalls, cars with run-flat tyres tend to hit ridges with the subtlety of a hammer hitting a nail, but the combination of the new five-link rear suspension being designed with them in mind and advances in run-flat technology means the ride is still good.

It's obviously on the firm side but there's no banging and crashing over rough roads.

As for the two engines on launch – the 2.0-litre diesel and 2.0-litre petrol – it's the same new story that the diesel is the better unit.

The petrol unit sounds great but it just has not got the power when you need it and there's a lot of waiting around before it starts to pick up pace. The 116i could be painful.

The diesel doesn't have the funky engine note but makes up for it by getting on with the business of firing out of corners on a gunpowder blast of torque and manages nearly 50mpg.

Driving verdict

The saving grace for fleet managers is that there are only 5,000 1-series around this year and most have already been sold, so you don't need to beat rabid employees off with a stick yet.

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Come 2005, we'd suggest an extra couple of bolts on the office door – this BMW will be the new, indispensable corporate car.

Fact file
Model	116i	120i	118d	120d
Engine (cc):	1,596	1,995	1,995	1,995
Max power (bhp/rpm):	115/6,000	150/6,200	122/4,000	163/4,000
Max torque (lb-ft):	111/4,300	148/3,600	207/2,000	163/4,000
Max speed (mph):	124	135 (auto: 132)	125	137 (135)
0-62mph (secs):	10.8	8.7 (9.2)	10.0	7.9 (8.2)
Fuel consumption (mpg):	37.7	38.2 (35.8)	50.4	49.6 (42.8)
CO2 emissions (g/km):	181	178 (190)	150	152 (176)
Fuel tank capacity (l/gal):	50/11
Service intervals:	Variable
On sale:	September
Prices:	£15,690 -	£22,080