BMW does most things right these days and the memories of the disastrous acquisition of Rover are receding. Now it's taking a step into the unknown with a new compact range to challenge the volume marques.
In BMW's sights particularly are customers for the top-of-the-line Volkswagen Golf and Audi A3, but also on the battle front is the huge mass-market C segment where models such as the Golf, Ford Focus and Opel Astra hold sway.
The big question is - can the new 1-series which goes on Irish sale in September repeat the success of its more familiar premium products such as the 3-, 5- and 7-series. Can BMW go downmarket and still have a premium car?
What BMW is doing is not really analogous with Mercedes-Benz and its A-class, but there are similarities. The A-class never won acceptance as a true Merc and it's still losing money, an estimated €110 million a year after six years of production (A successor is just now making its debut).
In fact, there's every reason to believe that 1-series is destined to win many friends. BMW people argue stridently that it's a true Beemer with high-performance rear-wheel-drive architecture that produces a sporty stick-to-the-road feel. It also boasts the best aerodynamics in its class.
The Bavarians optimistically forecast sales of 150,000 next year, rising to nearly 200,000 in 2006. Its imminent arrival should be enough to push BMW sales over one million this year. The 1-series is all part of a strategy to reach 1.4 million annual sales by 2008 simply by entering new segments.
There's also the example of the new Mini which BMW has turned into a remarkable commercial success.
The 1-series does have many styling relationships with its senior siblings. Essentially, the profile seems to an abundance of curves and creases - it makes the new Golf competitor look very conservative. The newcomer is 240mm shorter than the 3-series and 30mm down on the Compact, with the wheelbase 60mm shorter.
With the front wheels at the nose of the car, the extra bodywork overhang is behind the rear axle to give a respectable 330-litre boot, growing to 1,150 litres with the split rear seats folded. The Compact, by the way, is set to soldier on until the full 1-Series range (three-door hatch, saloon, coupé and estate) is in place.
BMW engineers at the Munich launch base stressed their quest for excellence through perfect 50/50 weight distribution. That meant a front suspension that is alloy and steel at the rear. Run-flat tyres are standard on all models, freeing space to put the battery where the spare wheel would be.
The engines? The fastest 1-series car is the 120d with 161bhp and a top speed of 137mph. It's a development of the 3-series 2.0 litre diesel. A 121bhp version of the same unit extends the diesel choice while petrol is represented by two British-built units, the entry-level 114bhp 1.6 and the 148bhp 2.0 litre. Both diesels and the 2.0 litre petrol get six-speed manual boxes or the optional ZF six-speed automatic. The 1.6 is five-speed manual only.
Those of us who tested the 1-series last week on the mostly flat and not too challenging Bavarian roads were convinced that it drives like a real BMW. It seems to be the best-handling car in the class.
The cars driven were the 120i and 120d with 2.0 litre petrol and diesel power. We were struck by steering's efficient weighting and the gearbox precision.
Under maximum acceleration, there was no pitch or lift under maximum acceleration or braking and at all times, both cars felt nimble and beautifully balanced. In the diesel, the extra mid-range punch of the turbo was appreciated - it felt unstoppable in the 1,600 to 4,400 rpm band.
For BMW adhering to the true faith of rear-wheel-drive highlights the car's only real drawback which is the serious lack of rear seat space. Even modestly proportioned adults will feel umcomfortable with virtually no leg space. This new BMW hatchback ignores the universal small car layout of a transverse front engine driving the front wheels. Instead it opts for a traditional longitudinal front engine driving the rear wheels.
Even with the allure of the BMW badge and driving excitement, it's likely that some will close the door firmly on ownership.