BMW, like most car makers, has followed the money and these days builds and sells far more of its ‘X’ badged SUV models than it does the sports-luxury sedans and coupes that built the brand.

In fact, BMW X models represent about 60% of the brand’s Australian sales and of these the compact X1 is a significant contributor, ranking as the brand’s fourth-best seller as at October 2022, even as the old model is being run out.

Within the premium compact crossover segment the X1 holds down a respectable fourth place behind rivals including the category leading Volvo XC40, Audi Q3 and Mercedes GLA, with other notable category contenders including the Audi Q2 and Lexus UX.

Following the launch of this all-new third generation X1, the Bavarian luxury car maker will be hoping to turn up the heat on these rivals and climb a rung or two on the category rankings.

The new model boasts new styling and expanded dimensions that give it more presence, with a large BMW kidney grille dominating its upright front end, flanked by slim LED headlights.

It looks more solidly planted and purposeful than its predecessor thanks to that widened track, with the optioned up xDrive 20i M Sport variant sitting planted on guard-filling 20-inch wheels.

Crucially, the compact X1 is longer, wider and higher than its predecessor, and it sits on a longer wheelbase with wider tracks front and rear, all of which makes for a more substantial vehicle, with more generous interior space.

Right now, you can have your X1 with the choice of two petrol powertrains, but waiting in the wings is the new iX1 Electric which is due in Q1 2023.

The launch model will be the iX1 xDrive30, with dual motors, outputs of 230kW/494Nm, a 67kWh battery, and 440km of range at a cost of $82,900.

Meanwhile, back with the combustion-powered X1’s, the new design is slipperier with a lower drag coefficient that means it moves through the air more easily, helping reduce fuel consumption.

Weight reduction measures also help in this regard via such methods as an aluminium bonnet, forged alloy wheels, lightweight door carriers and more.

Inside the all-new interior styling and layout features a floating armrest, handy upright wireless phone charger and a distinctive 10.7-inch curved digital display screen that’s a trickle-down from the iX electric vehicle.

Shapely sports bucket seats hold driver and front passenger snugly in place while the overall feel of the interior is light and airy, thanks to the use of slimline trims, and other deftly executed design touches.

Ahead of the driver is a 10.25-inch customisable digital instrument cluster and head-up display, giving plenty of options for accessing information at a glance.

It’s all nicely designed and impressively functional, with well laid out displays and the various entertainment, navigation and communications systems running BMW’s latest Operation System 8 software, which is smoothly integrated and easy to use.

The impressive 10.7-inch curved widescreen display screen is designed for touch interaction and dialogue using so-called ‘natural language,’ which we gather means you don’t need to sound too ‘plummy’ when issuing a command. 

As a result, there’s less buttons, maintaining the industry-wide fatwah on these once ubiquitous devices, with the system encouraging more activation through voice and touch. Thankfully, BMW hasn’t yet gone the full Tesla in this regard, so there are still a few shortcut buttons if needed.  

Prices are up over the old model, with the BMW X1 sDrive18i and X1 xDrive20i priced at $53,900 and $65,900 respectively, although BMW counters that so too is standard equipment.

There’s an increased focus on digital elements, including the availability of a digital key which is part of the standard ‘comfort access’ feature and provides proximity locking and unlocking, but now also enables sharing of the key with other users via a smartphone.

The X1 also includes what BMW claims is most advanced suite of driver and parking assistance systems available in the premium compact crossover segment.

The Parking Assistant Plus system includes surround view cameras, remote 3D view, reversing assistant, drive recorder, mirror package with anti-dazzle function and auto-dipping function and reversing camera.

The two-model X1 range comprises the sDrive18i and the xDrive20i, with the former featuring a 1.5-litre three-cylinder TwinPower Turbo engine that sends 115kW/230Nm to its front wheels via a seven-speed Steptronic dual clutch transmission. It manages the 0-100km/h ‘dash’ in a leisurely 9.0 secs, while sipping an average 6.5L/100km.

Stepping up to the X1 xDrive20i adds BMW’s xDrive system all-wheel drive system, matched with the same transmission but a gutsier four-cylinder TwinPower Turbo four-cylinder developing a healthier 150kW/300Nm.

The 20i also gets BMW’s Driving Assistant Professional system with steering and lane control assistant and its combined cycle fuel consumption is 7.4L/100km.

We drove both models over a single day drive program but spent more time at the wheel of the sDrive18i so will focus on that for this review.

Aside from the bigger engine and all-wheel drive system, the main feature advantages of the xDrive 20i over the sDrive18i, are its 19-inch alloy wheels, the Driving Assistant Professional system incorporating steering and lane control, plus heated and electrically operated seats for driver and front passenger.

As you might expect for $53,900 (MRLP) the compact sDrive18i is a well-appointed little unit, with features including 18-inch alloy wheels, navigation system with augmented reality technology, wireless Apple CarPlay and Android Auto, wireless phone charging, adaptive LED headlights, automatic tailgate, head-up display, sports seats, keyless entry and go, and more.

Other notable inclusions are parking assistant plus with surround view camera, blind-spot monitor, reversing assistant and drive recorder, and Driving Assistant Plus with active cruise control with stop and go functionality.

Out on the road, despite its shortage of cylinders and underwhelming outputs the sDrive 18i is a tractable little powerplant, at least when driven one-up and with no luggage.

The engine has a charismatic raspy note to it and is impressively flexible, pulling with turbocharged verve from low in the revs and proving nicely responsive at road speeds.

The engine mates nicely to the well-sorted dual clutch transmission which is notable for its low-speed smoothness and its direct-shift feel at highway speeds.

There’s some low-speed shunt at low velocity parking speeds or when reversing up inclines, but it’s generally fairly well-mannered. 

The suspension is set up on the soft side but not to the detriment of handling, with a semi long-travel compliance that allows the X1 to absorb bumps better than many BMWs we’ve driven.

The steering initially feels too light but it’s pleasingly direct and in combination with the vehicle’s predictably neutral cornering balance makes the X1 an enjoyable drive on an entertaining road.

It’s not a true ‘driver’s car’ in the traditional BMW sense, but it’s polished and confident on its feet, with good balance, nice ride, progressive brakes, and decently responsive performance.

The interior is very nicely finished and detailed, with faux stitched leather on dash and doors, shapely and supportive perforated leather seats, and a chunky leather steering wheel with satin-finish centre spokes.

The same satin-finish metal effect is carried over to the cutaway door handles and the overall quality of the interior materials and finishes are suitably premium.

Everything is nice and tactile to touch, from the precise weight and control of the air vents to the lovely textured aluminium and satin-finish material of dash, to the leather of the steering wheel.  

There’s lovely detailing in the door handles and floating door grips that emulate the centre console, while the metal-finish grilles for the Harman Kardon stereo speakers are a nice luxury touch.

The floating centre armrest is a distinctive design component, housing the gear shift, park brake, and a few other vehicle controls.

There’s a generous storage space beneath the console, plus good-sized door pockets which add to the overall utility. The vertical phone storage and charging point includes a small arm that holds the phone securely in place.

Gear shifting is via a tiny rocker-switch gear selector atop the floating centre console.

There’s no ability to control the transmission via paddle shifts, but you can knock the toggle back from D to 3L for a bit more verve.

The cruise control is excellent, holding the selected speed diligently up or downhill. 

There are twin USB-C ports front and rear for a total of four phone charging points, and two 12-volt power sockets.

The rear seat accommodation is spacious enough for a six-footer to sit behind another person of similar height and there’s plenty of room for two medium-to-large humans in the rear, or three at a squish.  

There’s good headroom front and rear and the 40:20:40-split second row includes a fold-down centre armrest with twin cupholders and deep storage bins in the doors, plus wide rear door openings that make for easy ingress and egress.  

An increase to the X1’s cargo capacity enhances its practicality with boot space growing by 35 litres (with second row seats upright) over the previous model to 540 litres, and from 1550 litres to 1600 litres with the second row folded down. There’s a handy underfloor storage area in the boot but the spare tyre options are limited to a tyre inflation kit.

The X1 is the first all-new BMW model to be sold with the brand’s newly extended five-year, unlimited-kilometre warranty, which is available on all new models from November 1.

Another new development with this model is the introduction of Feature on Demand which enables technology elements to be activated via subscription.

This is a new trend for most prestige brands but has been part of Tesla’s business model for some time and we can expect to see more of it.

Australian X1s are delivered with the hardware for heated seats and steering installed, but sDrive 18i owners need to stump up for a subscription plan to activate the features.

Owners of the xDrive 20i can warm their buns at no extra charge, but heated steering will still cost them, despite the small SUV’s $65,900 price tag.

Prices for these on-demand features vary according to the length of the subscription, with heated steering on both variants costing $29 per month, $289 for 12 months, $419 for three years, or $589 for a lifetime subscription which carries over to subsequent owners.

If you think that all sounds a bit rich on an already expensive prestige car, get ready to see plenty more of it from different brands in the near future.

Key stats

• RETAIL PRICE: $53,900 sDrive18i (MRLP)
• ENGINE:  1.5-litre three-cylinder TwinPower Turbo (115kW/230Nm)
• ANCAP SAFETY RATING: Not rated
• FUEL CONSUMPTION: (Combined): 6.5L/100km (151g/km CO2)
• FOR: Attractive styling, quality materials and detailing, roomier interior, supple ride, five-year warranty now competitive with rivals.
• AGAINST: Price, no spare tyre (inflation kit), additional costs for subscription service features.