Looks like BMW will try to take the fight even to the small-car market. The German automaker is reported to be working on a new 3-cylinder engine that’s expected to be fitted to the 1-series.

Autocar reports that the engine is based on the new 500cc-per-cylinder design and will incorporate BMW’s direct injection technology and turbocharging.

Mind you that BMW has grand plans for the unit and it isn’t expected to be just a paltry entry-level engine due to its size.

“This is not an entry-level unit. It’s a serious, refined, sporting engine with great CO2 figures,” a BMW source said.

BMW has had plenty of experience working on 3-cylinder engines on its bikes but they’ve made improvements on the 1-series to be able to accommodate the engine.

BMW has announced that they are seriously considering shifting away from their RWD and 4WD configurations and go for FWD layouts to be able to compete at the lower price range market.

Thing is, many BMW 1-Series drivers think that BMW has already made the shift to a FWD layout with the 1-Series. A survey of 1-Series drivers revealed that 4 out 5 think their engines power the front wheels.

BMW CEO Norbert (no, he’s not one of Dilbert’s cronies) Reithofer said that the survey results were “quite a surprise.”

BMW initially announced that the company will be making FWD Beemers for a car to be slotted below the 1-Series and will be based on the Mini’s platform.

I haven’t driven the 1-Series so I don’t know how it feels. Does it torque steer and oversteer that much?

Ring the panic bells. Ferrari’s going hybrid. Now BMW’s going front-wheel drive. Okay, so maybe that’s no real reason to play the doomsday card. It’s just the way it is for automakers these days. Embracing change and all the crap.

Anyway, the break in tradition won’t affect beloved models. Front-wheel drive will be introduced to a new entry-level model to be slotted in beneath the 1-series (pictured) and will be sharing components with the Mini.

This would usher in break from BMW’s tradition of building only rear-wheel and four-wheel drive configurations.

BMW’s looking to increase hardware sharing among its models to bring production costs down. Whether or not these savings will translate to lower-priced Beemers has yet to be seen.

BMW is really trying to dish out some competition for everyone in their market brackets despite the poor showing of auto sales all over the world. BMW, itself, is performing quite poorly these days but that doesn’t stop their research and development boffins to churn out new models.

CAR Magazine reports that BMW is considering giving 5 different variants for the 2011 next-generation 1-Series. The variants would include a 2-door hatch, a 3-door shooting-break (who goes hunting or golfing in a 1-Series?), a 3-door sport wagon, a 3 or 5-door GT1, and a 3-door sport activity coupe.

Now that’s quite the selection of variants to choose from. In a marketing perspective, while this would probably give buyers a huge range of choices, it might just water down the car’s impact to buyers. Why make a 3-door shooting-break 1-Series when another model (say, an X3 or X5) would probably serve those who do sporting activities better.

Source: CAR