Damien O’Carroll looks at what BMW has done to address criticisms of the 1 Series while retaining its key features.
When BMW decided to slot a smaller model in under the 3 Series back in 2004 following its fairly half-hearted attempt at the same segment with the underdone 3 Series Compact, it made the key decision to keep the 1 Series rear-wheel drive in order to retain the traditional BMW hallmark of a fine-handling RWD experience.
Which was great for driving enthusiasts, but not so hot for internal packaging, particularly rear legroom.
With the second generation car BMW has attempted to address the packaging concerns by making the new car (slightly) bigger, but has resisted the urge to take the 1 Series front-wheel drive - although this may well be your last chance to appreciate that fact, because the current platform is apparently able to be set up in either RWD or FWD configurations, and FWD 1 Series models will start filtering into the range over the next few years. 
According to current speculation and rumour, eventually the only 1 Series models to be available in RWD will be the coupe and convertible.
While a FWD 1 Series hatch will undoubtedly be a fine car - in the way that the Mini is a fine FWD hander – it will still rob it of some of its essential character: think of a Mazda MX-5 with a couple of extra seats and doors and you’re getting close to what the 1 Series uniquely offers in the hatch segment.
And it is this character that the 118d offers in spades.
The 2-litre turbocharged diesel engine offers 105kW of power and 320Nm of torque that comes in with a mighty satisfying push back in your seat when it arrives at 1,750rpm. A feeling that is made even more satisfying by the fact that it is delivered to the road through the rear wheels.
Nail the throttle out of a tightish corner and the rear end gives a wonderful wriggle as the torque pours on and the tyres do their level best to maintain grip.
The new 8-speed automatic transmission is the perfect partner in crime for the punchy diesel engine, with slick, fast shifts and an almost psychic ability to be in the right gear at the right time when in Sport mode. Normal mode is a bit more lethargic, as it takes a more relaxed approach to shifting through all the ratios, but it is still never anything less than smooth and accomplished.
While a 0 to 100 time of 8.9 seconds isn’t exactly mind-bendingly quick, the 118d feels brisker than the officially-claimed figure, largely because of the way the power comes on when it is up and running. And it is this impressive punch combined with remarkably frugal fuel consumption that is the 118d’s most impressive party trick.
BMW claims an average combined consumption of 4.5L/100km and, in the real world, this is surprisingly easy to achieve. Thrash it like a rented mule and it doesn’t make a lot of difference either, with mid-sixes being about the worst you would see.
Around town the 118d is a light, comfortable, almost ridiculously easy car to drive; out on the open road it is all of those things and yet still manages to be sharp, responsive and ridiculously fun.
While the suspension carries over from the previous-generation car (Macpherson strut at the front, multi-link at the rear), the increase in overall size has seen the track get a little wider, and BMW has improved the bearings, bushes and mounting points of the suspension, resulting in greater compliance and, as such, a better quality ride.

Inside the 1 Series is all BMW, with a swoopy new dashboard that keeps the hard plastics nicely out of reach and the kind of ergonomic good sense that the German manufacturers are so good at.
The increase in size has seen an improvement in rear legroom, but it is still pretty tight back there and is the biggest disadvantage the small BMW suffers against its FWD rivals.
Looks-wise, while the new 1 Series may still not be to all tastes, it is all kinds of better when compared to the original. While the front gets BMW’s corporate nose, with its wider, more aggressive look, the single biggest improvement to the exterior comes from the dropping of the weirdo droopy sill line that cursed the previous model and made it look frumpy and bloated.
At $56,600 the 118d you see here tops the current 1 Series range, and with a good level of standard equipment and the basic quality of the package, still manages to come out on the happy side of the value-for-money equation for a small car. 
Although the extra $18,000 worth of options BMW NZ have added to make the final price top out at a fairly colossal $74,600 is questionable at best.
The optional navigation system is excellent, but in all honesty, not worth the $4,000 BMW asks for it. Electric driver’s seat adjustment for $2,400 is steep and pretty unnecessary, as is the $800 asked for heating the front seats. The $500 adaptive headlights and $250 high beam assist, however, are worth every cent.
When it comes down to it though, whatever extra you would choose to spend on the 118d doesn’t really matter (other than at resale time, of course) because the basic, underlying package is just so damn good. And so utterly convincing.