You know the cycle when you see it: a company becomes successful for one thing, then as years pass, the company loses touch with what originally made it great. Remember Oldsmobile? Yup, you get it. One could argue that in recent years, the great carmaker from Munich has strayed from its roots. Since the late 1970s, BMWs have steadily grown, gained equipment, and put on weight. Correspondingly, their prices have escalated. At $32,400, the least expensive 2008 3-Series is not exactly cheap. BMW recognized that the maturation of its traditional models left a gap at the low end of their product line in the US, and have now seen fit to plug it.

In Pictures: BMW 1-Series

Their cork is the 1-Series. If you stay up late reading car magazines or surfing automotive blogs, you already know that the 1-Series has been on sale in Europe since 2004 as a 3- or 5-door hatch. Given Americans' reluctance to consider a hatchback as anything but a "cheap car," BMW has held off on shipping the 1-Series until its coupe goes on sale in March.

Two models will make the trip; the 128i for under $30k, and the 306-horsepower 135i for about $35,000. Compared to a base 328i Coupe at $35,300, the 1-Series should attract attention from buyers looking for a more back-to-basics BMW at a more down-to-earth price. Those looking at Infiniti's excellent G37 coupe, or moving up from a hot hatch like a GTi or MazdaSpeed3 might also be 1-Series marks according to BMW's marketing department.

BMW trotted out a pair of beautifully restored 2002s to trumpet the brand's recognition that it needed a new entry-level car since the 3-Series had grown too big for those britches. For those too young to remember, the 02 series (produced between 1966 and 1978) stands out as a defining vehicle for BMW. The 2002tii attained true cult status in the US thanks to its giant-killing performance. At the time, no one knew that the car would set BMW's direction for the next three decades. BMW claims the 2002 as the inspiration for the new 1-Series Coupe.

Thankfully, the 02 remained only an inspiration. The 1-Series is clearly not a retro BMW. The family resemblance to the current 3-Series is strong. The finished package shares the long-hood/short-deck of the 3-Series, but the 1 is smaller. Its 104.7" wheelbase is 4" shorter than the 3 Coupe, but its truncated shape is shy of its bigger sibling by half a foot. Its overall width is almost 3" narrower and the weight distribution is an even 50/50.

Inside, the front dimensions are generous enough, but things are bit more snug in the rear compared to the Three. There is room back there, but what do you expect, really? It's sufficient for occasional use. In a nod to practicality, the rear seat back includes both pass-through and 60/40 split-folding access to the trunk.

The interior accommodations are what you've come to expect from BMW of late -- less austere and more attractive while remaining easy to use ... with the notable exception of iDrive. The revised iDrive software is better than before, but it remains stifling at first encounter and often counterintuitive with experience. The interface, however, now communicates directly with the USB-based MP3 player. All other major controls make perfect sense, and are well positioned for easy use and/or viewing. A navigation system is optional.

Those familiar with the 3-Series will recognize the two available 1-Series' powertrains. Contrary to what their badges might suggest, the 128i and 135i both utilize 3-liter in-line six-cylinder engines, same as the current Three. (Back in the old days, on BMWs, the first numeral of the name denoted the body style-1, 3, 5, 7-while the following numerals represented the size of the engine.) The 128's engine is the naturally aspirated 3-liter and produces 230 horsepower while the 135's uses twin turbos in a parallel configuration, not sequential. This means that each of the 135's identical turbos is fed by three cylinders. The turbos' small size means they build boost (power) quickly and efficiently, delivering the feel of V8 without any of the lag long associated with this type of forced induction. (BMW also builds a diesel engine with sequential turbos ... one small turbocharger works at low engine speeds while a larger blower functions at higher engine RPM.)

Two six-speed transmissions are available, the expected manual and an automatic. As good as the automatic is, enthusiasts will prefer the manual gearbox.

Our driving experience took place on Gotland, a picturesque Swedish island in the Baltic Sea. Perfect late fall weather with blue skies presided over smooth and gently curvaceous asphalt. A red 135i with a manual gearbox met us at the Gotland airport with a stance that said, "Come on, I'm ready." The aggressive look comes standard on the turbocharged model as part of the M-Sports appearance package that is recognizable by the more aggressive front fascia with larger air passages and the chrome surrounds on the grille.

With the ambivalence of a well-traveled and jaded I've-seen-this-before journalist, yours truly blasted away from the staging area only to be stopped firmly in his tracks by the island's beautiful topography and the occasional medieval church. The day's destination was the Gotland Ring, a brand-spanking new circuit built to Formula One racing standards. Those Swedes, ever conscious of their carbon footprint, plunked down wind turbines like other circuits plant grass, giving this facility an arguably green presence.

Over the road to the track, our 135i with the standard M-Sport suspension felt darn near perfect, even when the roads weren't. The body is stiff, as it should be, and the suspension also felt sporty ... as it should. BMW describes the front suspension as an aluminum double tie-joint axle, while the rear suspension is a multi-link design with five arms that locate each axle shaft. Most European models get electrically-assisted steering, but high-performance 135s get old-fashioned hydraulic boost. Apparently, BMW listened to its owners (and maybe a couple of journalists) gripe about the artificial feeling of electric steering assist on other models, and gave us what we asked for.

A typical journalist-grade speeding ticket in Sweden will set you back a couple hundred Euros (an amount that seems to get more expensive by the hour for those who pay in green backs). Showing unusual restraint, we laid off the throttle until we made it to Sweden's new Ring. Our first laps there were made at modest speeds in an effort to gain a better understanding of what pushing it on the street might feel like. The steering is spot-on and communicates well, as do the brakes. The 6-speed shifter operates well, but the shifting experience lacks a certain mechanical engagement that the best boxes deliver. Stability rules the day, whether electronically imposed by the standard Dynamic Stability Control (DSC) or the chassis's set up that favors understeer thanks to the staggered tires measuring 215/40 18 in front and 245/35 18 in the rear. This is not a car that will bite you, even though it can rip off 0-60 mph in the low 5-second range and has an electronically limited top end of 155 mph.

Mirroring our experience in the 335i, the One's six-cylinder engine is refined and responds without turbo lag or huffing and puffing from the wastegates. Those hooliganistic noises have no place in a BMW, thank you. The flat torque curve plateaus at 1300 rpm and stays at 300 lb-ft until 5000 rpm. On the road or track this means something always happens when you hit gas.

Ratcheting up the speed made the car's bias toward stability even more pronounced. The Dynamic Stability Control actively but smoothly intervenes when barreling around corners, helping the 135i stay in complete control. Push the throttle hard enough around a corner and you'll feel the outside-front brake working hard to keep you pointed where you want to go. Stay deep in the throttle and eventually the engine will give you less power to play with. Shutting down the Dynamic Traction Control livens things up, and the entire system can be completely turned off allowing more experienced drivers to run considerably faster laps. The electronically-controlled differential lock remains functioning at all times, preventing the inside rear wheel from lighting up when exiting a corner hard on the throttle.

Drivers with track experience will immediately recognize the 1-Series' pushy attitude. Expect Dinan or another BMW tuner to soon offer a stiffer rear sway bar to give the car a more neutral, easier-to-rotate, track-happy attitude adjustment. Perhaps a different tire stagger is also in order. As it is now (and as it should be for most drivers), lift-throttle oversteer is non-existent and throttle-on oversteer is near impossible to induce. In other words, if you crash one of these, you've probably done something really stupid.

At 3440 lbs, the One doesn't feel heavy on the track, but doesn't feel light either. Stability, again, is the word that best describes its performance. Even in high-speed S-curves, the chassis managed the transitional quick side-to-side loads smoothly -- a gold star challenge for sure. Track-wise, our only other concern focuses on the brakes. The six-piston front binders burned off speed easily, but after one particularly quick lap, we hit the pits with the binders smoking. For the record, two-piston calipers clamp on the rear discs. Track- day junkies might need an upgrade here too, but the system's performance is more than adequate for any kind of street driving.

Our Euro-spec tester (correct in all respects except the interior trim) was wrapped in a high-quality cloth that we wish would come to the US market. BMW, however, intends to bring over models with standard leatherette or optional leather. If it would knock even $500 off the base price, we'd gladly take the cloth. Such an offer, along with dropping the 135i's superfluous non-speed-baring features such as the power seats and bi-xenon headlights, would ring even truer with BMW's linkage of the 1-Series to the iconic 2002. With that car, especially in a historical context, less was more. Maybe BMW needs to take one more trip back to church to discern whether the 1-Series relates strongly enough to the 2002?

With pricing expecting to come in at under $30k for the 128i and under $36,000 for the 306-horsepower 135i, the 2008 1-Series packages BMW performance and style in a smaller, more affordable package that many drivers should find just right.

In Pictures: BMW 1-Series

2008 BMW 135i

Engine: 3.0-liter I-6, 306 hp/300 lb-ft

Transmission: Six-speed automatic, rear- or all-wheel drive

Length x width x height: 171.6 x 68.8 x 54.4 in

Wheelbase: 104.7 in

Curb weight: 3440 lb

Fuel economy (EPA city/hwy): N/A

Safety equipment: ABS; DSC; DTC; front, side, side-curtain air bags; two-stage LED brake lights; daytime running lamps

Major standard features: Power windows, power door locks, keyless entry, air conditioning, AM/FM/CD audio system with MP3 capabilities, leatherette upholstery

Warranty: Four years/50,000 mile with all maintenance included

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