Remember the rumors of BMW working on a hot 1 Series hatch just below the 1 Series M? The evidence trail was so faint that we called it "the most speculative sort of specualtion" when we posted on it six months ago. The trail and the car just got a lot hotter now that the very three-door hatch in question, the M135i, has been spotted burning serious gas around the Nürburgring.

Juice will come from BMW's N55 inline-six cylinder with somewhere around 320 horsepower, and we're told there will in fact be an all-wheel-drive version to follow. This will put BMW at ground zero of the small luxury hot hatch battle alongside the 350-horsepower Mercedes-Benz A25 AMG and 340-horsepower Audi RS3. That gives us one more thing to remember: even if the Benz comes in at 340 hp there'll be 1,000 horsepower between just these three cars in a segment best known for frugal luxury, which means the good old days in this segment are still on the way.

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