GOTLAND, SWEDEN – Barreling around the Gotland Ring racetrack here in BMW AG’s new 1-Series clearly demonstrates the new coupe doesn’t deserve its entry-level label.

Far from it. If anything, the ’08 1-Series is one of the best-performing BMWs not to wear an “M” badge.

It’s little wonder BMW brass refer to the sports sedan as a modern interpretation of the iconic BMW 2002 sold from 1968-1972, the model that helped cement the German auto maker’s status as a manufacturer of world-class performance cars.

The 135i tested here is powered by the more potent of two engines available in the 1-Series – a twin-turbo 3.0L inline-6 producing 300 hp and 300 lb.-ft. (407 Nm) of torque. BMW also will offer the 128i, powered by a normally aspirated version of the 3.0L producing a respectable 230 hp and 200 lb.-ft. (271 Nm) of torque.

The 1-Series offers either a 6-speed manual or automatic transmission. The test car featured the manual, which took no time to get cozy with, thanks to its crisp, short throws and accommodating clutch.

On paper, 300 hp is a respectable number even to the most diehard BMW enthusiast. But once rubber hits the pavement, performance surpasses expectations, reminiscent of the 3-Series before it grew up. That’s not to say the 3-Series isn’t entertaining; it is. But the smaller, less-refined 1-Series is a blast to hurl around corners.

“The 1-Series is BMW distilled to its purest form,” says BMW U.S. Holding Corp. CEO Tom Purves. “It epitomizes pure excitement, pure power and the purest driving experience.”

The twin-turbo setup is designed to eliminate lag, as each blower serves three cylinders, quickening spool-up times. The result is a seamless power curve, making the twin turbos difficult to detect. Further masking their presence, turbo whine is kept to a minimum.

Thanks to this unique setup and some exceptional tuning, the 1-Series’ 300 lb.-ft. of peak torque is available as low as 1,400 rpm.

While straight-ahead speed is exceptional, it’s the phenomenal handling that makes the 1-Series something special.

The slightest steering adjustment is instantly transmitted to the road. Just pick your line, aim the 1-Series and quickly glide through corners, with tires squealing and smiles growing.

Throttle response is topnotch, with just a tap of the accelerator translating nearly instantaneously to the rear wheels.

BMW says the 135i is capable of reaching 62 mph (100 km/h) in just 5.3 seconds, and rates its top speed as an electronically limited 155 mph (249 km/h).

The 1-Series’ outstanding handling characteristics largely are due to its unique suspension system. Up front, the coupe boasts an aluminum double-pivot suspension, while the rear features a 5-link fully independent suspension, forged out of lightweight steel.

The double-pivot front suspension’s track control arms and thrust rods provide a stiff-but-forgiving ride, which should satisfy a range of buyers.

’08 BMW 1-Series
Vehicle type front-engine, rear-drive, 4-passenger coupe
Engine 3.0L twin-turbo V-6
Power (SAE net) 300 hp @ 5,800 rpm
Torque 300 lb.-ft (407 Nm) @ 1,400 rpm
Compression ratio 10.2:1
Transmission 6-speed manual
Wheelbase 104.7 ins. (266 cm)
Overall length 172.2 ins. (437.4 cm)
Overall width 68.8 (174.8 cm)
Overall height 55.4 (140.7 cm)
Curb Weight 3,373 lbs./1,530 kg
Base price range $29,375-$35,675
Fuel economy N/A
Competition Audi A3, Lexus IS350, Infiniti G37
Pros Cons
300-hp twin-turbo No M version
Edgy exterior design Styling may alienate some
Great handling A tad heavy

To keep drivers out of trouble, the 1-Series comes available with BMW’s Dynamic Stability Control and Dynamic Traction Control, which provide electronic intervention to prevent loss of vehicle control – but only during extreme circumstances. Seasoned drivers will be pleased to know that both DSC and DTC can be disabled.

Helping with cornering are BMW’s Active Steering, a variable-ratio steering system and electronic rear brake management, which BMW says simulates a differential lock for stronger acceleration through turns.

The exterior carries forth BMW’s design language – a rearward sitting greenhouse and long hood – the brainchild of chief designer Chris Bangle. However, it’s also reminiscent of the 2002, with a more vertical stance than other BMW coupes.

The look is a refreshing, thoroughly modern update of the 2002’s styling, though it may turn off some BMW aficionados.

Rear haunches are set high, and when combined with BMW’s signature split kidney- grille, close-set adaptable xenon headlights and short overhangs, the car takes on a menacing look.

Additionally, the 135i model comes standard with an M aerodynamic kit.

The rear of the 1-Series benefits from horizontally positioned light-emitting diodes integrated into the tail lamps, giving the coupe a futuristic appearance at night.

Inside, it’s typical BMW, a no-nonsense, Germanic mix of wood and leather. There’s nothing too flashy, but the controls are where you expect them to be in a BMW and the seats are firm, with plenty of lateral support.

Unfortunately, the 1-Series comes equipped with the now infamous iDrive human-machine interface, which BMW is sticking with despite complaints it is counter-intuitive. Although it remains complicated, with enough time behind the wheel, iDrive does get easier to use.

The 1-Series arrives in the U.S. in spring 2008 in both coupe and convertible body styles. BMW brass maintain the car will not cannibalize sales of the all-important 3-Series. However, after driving both in a relatively short period of time, we think the 1-Series may have assumed the mantle of the “Ultimate Driving Machine.”