When it was launched the radical rear-wheel drive 1 Series was widely praised for its handling dynamics and mechanical efficiency but criticised for its restricted cabin space and meagre luggage capacity.

In launching the New 1 Series BMW has taken on board customer complaints so that it is 83mm longer, 14mm wider and, most importantly, has a 30mm longer wheelbase wrapped in a slightly more curvaceous body.

It retains the traditional kidney shaped grille, three section air intake, Hofmeister kick in the rear three quarter and wide set wheel arches – elements which instantly identify a BMW.

Stretching the body has released a little more room in the well-appointed 1 Series cabin but like most BMWs it still isn’t especially generous particularly in the back, despite having 21mm more leg room. But, it is still suitable for a 6ft adult including the roof line which on the outside, with its coupe sweep, looks almost impossible.

Billed as a five-seater this should be taken with a pinch of salt as the transmission tunnel leaves next to no leg room for the middle occupant in the rear – save this place for small children.

Up front the controls and instrumentation are all angled, in typical BVMW style, towards the driver and set into a layered dashboard which is clothed in slightly higher quality soft-touch materials.

Particularly welcome is the increase in load space – up 30 litres on its predecessor.  This is located in a boot that has a wide hatch and where the rear 60/40 split rear seats fold completely flat in one easy action to swell the carrying capacity from 360 litres to 1,200 litres.

Retained from the first generation 1 Series is the front-engine rear-wheel drive configuration which, not only makes it stand out from the crowd, but also produce one of the best handling hatchbacks you can buy.

This has been improved on the latest generation with wider front and rear tracks and tweaks to the suspension. Electronic support systems also include Variable Sports Steering, Driving Stability Control with Dynamic Traction Control and an electronically locking rear differential – all as standard.

Overall there is a calm assurance about the way the 1 Series grips the road with just the right amount of feedback to the driver for the steering wheel to keep them fully in command.

The rear-wheel drive is also very predictable and unless pushed very hard doesn’t exhibit the oversteer characteristics often associated with this layout.

When it comes to engines, BMW hasn’t stood still. The re-launched 1 Series is initially offered with a choice of five longitudinally mounted units featuring two new generation TwinPower four-cylinder petrol engines and three diesels with significant improvements to its award-winning four-cylinder 2 litre oil burner.

And then more recently BMW has added a 116d EfficientDynamics diesel promising close on 75mpg and emissions below 100g/km which is designed to broaden the scope and possibilities for the 1 Series.

Starter unit is a highly respectable and now more powerful and more efficient 1.6 litre twin-scroll turbocharged, direct injection, variable value control petrol engine producing a useful 136bhp (up 15bhp) and a maximum of 220Nm of torque.

This results in a sprint time of well under nine seconds and a 130mph top speed, while fuel consumption gets close to 50mpg and emissions have fallen by 14 g/km to 129 g/km.

This is enhanced by the option of selecting between four settings: Comfort, Sport (which increases throttle responses and the sharpness of the steering), Sport Plus (which disengages the traction control) and Eco Pro (which adjusts the throttle responses to be more economical and also reduces the air conditioning operation) – BMW claims the latter can cut fuel bills by up to 20 per cent.

It also had a dashboard readout which tells you how much better you are doing – in miles to the gallon – than in the previous setting which is quite a cheery incentive to do better.

Fuel economy is assisted by automatic Stop and Start – which can be deactivated at the push of a button – and a gear selection indicator for the slick six speed manual transmission.

In normal driving mode, I managed to average 36.4mpg but then when I switched to Eco Pro mode this quickly improved to 41.4mpg.

The 1 Series also benefits from BMW’s Efficient Dynamics programme where the under body is flush to aid aerodynamics.

New 1 Series is offered in four trim levels: ES, SE, Sport and Urban. Sport models, as tested, come with 17-inch light-alloy wheels, dark chrome exhaust pipe, high gloss black interior trimmings, multi position adjustable sports seats with lumbar control, cruise control (operated from the leather wrapped steering wheel), dual zone climate control and keyless start and stop.

As in most 1 Series there is an iDrive multi-function infotainment control unit in the centre console which operates aspects such as the audio, Bluetooth and car functions.

For those who like the driving experience only a BMW can provide, but who don’t need a sporting saloon, the 1 Series ticks all the right boxes. Alternatively if you appreciate the versatility of a hatchback but want something a little above the run-of the mill, the 1 Series has it all.