BMW don't make hatchbacks, but if they did, they would probably make the best hatchbacks in the world. Or was that Carlsberg? Either way, hell has frozen over, and hunters have ordered some anti-aircraft artillery to take down those pigs, because it finally happened: The BMW 1-series is here. Launched in 2004, the range was further updated in 2005.The review carThe car we reviewed was a BMW 118d ES with a 2.0 litre 122 horsepower diesel engine. BMW 1-series driving experienceForget everything you have ever experienced or read about hatchback cars - the BMW doesn't fit the description. Gone are the days where hatchbacks had to be small, functional cars that did the trick - but only just.The 1-series doesn't just carve out a new niche for BMW, it also is a bold entry into a new market for the Bavarians. Taking on countrymates Audi A3 and the Volkswagen Golf at their home turf takes a lot of guts. If there is one thing the BMW 1-series isn't missing, it's guts.The interior is simple, but very well built, and instantly conveys a message of "I mean business". And it does. As the Diesel engine purrs into life at a press of the ignition button, knocking the car into gear and pulling away only serves to strengthen the idea that you are driving something unusual.For a start, this isn't just a hatchback with a BMW badge, it is a full-fledged executive-class car that just happens to be small: On the engine side, our test vehicle had a 1.8 litre diesel which suited the car perfectly. Nimbly darting away from stoplights, fast acceleration, and plenty of power for just about anything you could wish to throw its way.Not a race car by anybody's standard, the performance from the 1-series is ample. The car's handling is nothing short of outstanding. The suspension is firm, yet accommodating and reassuring. Small humps aren't as much dampened as completely and comfortably absorbed. The BMW's trademark rear-wheel drive system works a charm also in this smaller car, but it is good knowing there is an advanced electronic stability control system keeping you on the road facing the right direction. Switching it off unleashes the engine's full power, with wheelspin a-plenty. Fun? If you are into that kind of thing, sure, but personally, we'd be more than happy to trust the on-board computers to keep us on the road.The engine bay and the rest of the world are very well sound-proofed, and cruising at all speeds is done at great comfort. The seats are on the 'sporty' side (which means they are too hard), but height-adjustability and a generally comfortable ride means that this German is like a dream even for longer trips.Some of the best handling available in its class combined with engines that give you a great combination of power and fuel consumption, the 1-series offers just about anything you might look for in a small executive cruiser.Design and usabilityBoth on the exterior and interior, there is no mistaking the 1-series: it is a thoroughbred Bavarian, through and through. Build quality seems solid, and the car has enough pockets and storage around the drivers' seat to make it comfortable for people who spend a lot of time in their cars.The boot is relatively small and it's not as well accessible as its competitors, but we expect this will not be a big issue to potential 1-series buyers anyway.In the front seat, legroom is ample, and the seats are well adjustable to accommodate drivers and passengers of any height. If two tall people occupy the front, however, there is not really any space in the back for passengers.Who is it for?The 1-series would be a good choice for many people: The businessperson who is tired of having to lug around in a large car, the hatchback-aficionado who wants a propeller on the bonnet, or someone who simply wants one of the best-handing hatchbacks out there.Considering the back seat is just about useless most of the time, the 1-series can best be seen as a large roadster that happens to have a back seat - Not great for families, but useful in case you have to transport people or things over shorter distances.So, should you buy one?The biggest argument against buying the 1-series is what the competition delivers at the same price. The test vehicle had a list price which was only a few hundred pound shy of £20,000. For that price, there are a lot of exciting vehicles worth looking at in the same class- most notably the Golf GTI or the Audi A3 Sportsback.If you want one of the best hatchbacks money can buy, you can't really go wrong with the 1-series, as long as you keep in mind that you can buy a far larger car (say, a Vauxhall Vectra 1.9 CDTI or a Renault Laguna 2.2 DCI) with similar build quality and engines for the same amount of money.Positively, the 1-series is likely to receive very good resale values, which means they should be available on good contract hire and leasing deals. Oh, and if you buy one, it makes a great resale or part-exchange item when you are ready to move on.Which model would we choose?The tested model - 118d - is an quintessence of refinement in the Diesel Hatchback sector. With a combined cycle falling just a fraction short of 50mpg (and just above 60mpg for motorway cruising) you are saving a lot of money on fuel costs, and it has enough power to keep it fun.BMW has also launched a beastly 130i which comes with a mad-as-a-hatter 3-litre 6-cylinder engine. It is a beast, but with insurance group 17, a list price of £24,000 and a combined cycle of 30.7 mpg, the price is beastly too.If money is no object, get your hands on a 130i. Otherwise, the 118d is our model of choice.