The new 5-series is all about the drive. BMW has to have the best driver's car in the executive class, as it has had for the past eight years, or it is not worth doing. The launch left you in little doubt that the search for the Ultimate Driving Machine has been obsessively thorough.

The firm is staking its reputation on its heartland car, and it is replacing the legendary model that since 1995 has sold more than 1.3 million units worldwide. It will also have to take on the extremely proficient Mercedes-Benz E-class – one of the best all-round cars in the world.

BMW (GB) expects to sell about 7,000 cars in 2003 after the September on-sale date, and 15,000 in 2004, which would match the best year of sales for the old car.

But the new flame styling, already in evidence to more or less degrees on the 7-series and Z4, is not universally popular.

First glimpses through the heat haze confirmed it is not as odd in the flesh as it looks on paper, as seems to be the way with the new Chris Bangle-designed Beemers.

I love the winged headlights that soar up the side of the car, the lines from grille to A pillar, and the scalloped doors. From square on at the back, the 5-series is architectural with concave and convex surfaces dancing with each other.

The C-pillar and boot lid meet awkwardly though, while the front grille has lost its aggression and looks generic. How this will play against the classically handsome E-class and economically stylish Audi A6 remains to be seen.

According to intial estimates by CAP, the fact that the 5-series is dynamically and stylistically opposed to the E-class will be good news at resale.

The car will initially be available at launch in 520i, 530i and 530d versions, with the six- speed auto or manual gearbox to choose from for the last two.

These engines have been around in the 5-series for a while so offer not much new, and are still brilliant. The diesel is still not Euro IV compliant, but BMW engineers say it is extremely close, and will need just a little refinement to get there in the future.

It is the first car to come with Active Steering as an option: by analysing the speed, yaw rates and slip angles of the car and wheels, electronics adjust the gearing to change the steering ratio, which means at slow speeds less turn is needed, while at high speeds the steering becomes more indirect, and therefore less edgy. Servotronic power assistance also helps lighten the load at low speed.

If the car detects it is entering a slide, the Active Steering will countersteer itself to calm everything down, doing this before traction control kicks in, and long before the driver has had time to react.

Prices have not yet been announced, but expect to pay about £30,000 for the two 3.0-litre SE models and £25,000 for the likely best-seller, the 520i SE, which should be an average price increase of about 2%.

All will come with auto air conditioning, iDrive and eight airbags as standard, and Active Steering, adaptive headlamps, Dynamic Drive, parking sensors, and a six-speed Sequential Manual Gearbox as options.

Behind the wheel

There are no real surprises on the inside of the 5-series if you are already familiar with the larger 7-series. The iDrive system is retained, although in simpler form, now with only four areas: navigation, entertainment, climate control and communication.

The housing for the iDrive screen has become a little more elegant, with the screen sitting under a swooping canopy butted on to the side of the instrument binnacle.

The driving position is fine, although oddly the wheel is canted slightly towards the door. But where the 5-series excels, and where the main sales push will come from, is in the brilliant driving dynamics.

The Active Steering plus firm suspension set up means that for a large executive saloon the handling is precise, taut and exacting. The steering is communicative to the point of opinionated on B-roads – giving the driver on a blast the exact level of feedback needed. On motorways, the Active Steering ensures a more mellow response.

Match the steering to the best engine of the two, the bestial 3.0-litre diesel which has 369lb-ft of torque available from 2,000rpm and it is throaty under acceleration with no chugginess, and you effectively have a charging bullock in ballet shoes. The 530i is as smooth and barky as you would expect, but without the mid-range grunt of the 530d.

Push the car hard into a bend and the front tyres will grip and grind. Everything feels very neutral and safe. Throw it quickly in the opposite direction and the 5-series will dance from wheel to wheel, and will do exactly what you want, responding instantly to inputs from steering, braking or throttle. There is nothing else in this class that could come close to the agile dynamics of this car.

On the motorway, the price for the B-road fun is apparent. The large wheels and stiff-walled run flat tyres create a quality ride that whacks creases noisily. On taller tyres that might go away though.

Driving verdict

There is no doubt the styling will not be to everybody's taste, but BMW will sell the 5-series from behind the steering wheel, because that is where this car excels. Dynamically, nothing in the class can touch it, particularly in 530d guise.