I wrote previously about Mercedes’ foray into the small car market. As strange as that may seem to many Americans, both Mercedes and BMW have long produced smaller and less costly models for the European market. Now, it appears that BMW is considering doing the same: introducing to the North American market a truly compact car, smaller than any BMW that has ever graced our highways and back streets. Is this a good move for the German automaker? Or, will it water down a prestigious brand name?

Part of any automaker’s marketing strategy is to convince you, the consumer, what their vehicle line is all about. Dodge would like you to believe that they sell sporty cars and rugged trucks; Scion touts their youth oriented vehicles; and both BMW and Mercedes, like Cadillac, sell luxury vehicles. Millions of dollars of advertising is spent per year to reinforce brand image which is supported by consumer surveys of that particular sentiment.

Speaking about Cadillac, in the early 1980s GM’s luxury brand briefly marketed a compact car – the Cimarron – that ultimately bombed, in part, because it strayed far from its big luxury car base. Sure, the car was little more than a rebadged and re-tweaked Chevrolet Cavalier, but it contradicted the entire Cadillac mystique. Even a slightly larger and much later model, the Catera, also failed as the car was perceived for what it really was: a remade Opel.

So, now the dilemma: will consumers accept the “1 Series” BMW’s planned entry or will it cause confusion and diminish the BMW name? As a backgrounder, the current 1 Series is expected to be overhauled in 2006. Right now the car is offered as a sport hatchback, but the hatchback isn’t likely to be imported due to America’s aversion to that particular body style. Thus a sedan version is being considered by BMW for production according to published reports.

I visited BMW’s U.K. site to examine the current Series 1 model. With the typical BMW fascia in place the Series 1 resembles a slightly stretched Volkswagen Golf mated to a compact BMW. The “1” comes equipped with either a 1.6L or 2.0L I4 gasoline engine, a gas 24V 3.0L V6, or a 2.0L four cylinder diesel that achieves a whopping 50 mpg fuel economy. Prices for the “1” start at just under $25,000

Equipment on the “1” is typical BMW with ABS and all the full luxury appointments. Clearly, the current “1” is not a stripped model as it features many of the amenities found on larger BMWs.

In my opinion BMW must tread carefully in bringing a car of this size to the American market. Forget the hatchback and just go with the sedan with either a wagon and or a coupe being a possibility. Unlike the basic Mercedes models, the “1” may just be able to pull it off for BMW and allow the German automaker to sell a tiny BMW successfully in the U.S. Alternatively, BMW just may want to consider launching a separate brand, to retain the BMW mystique in the American market.

Matt Keegan is a contributing writer for the Race Pages as well as an automotive fan. For the best BMW parts, including auto radiators, or for quality Borla exhausts, shop our store today!