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There’s an all-new BMW 3-Series. And, yes, this is big deal.

Not just for BMW – it is the company’s best-selling car – but for anyone who might be in the market for a compact sedan in the coming years.

Even if a 3-Series doesn’t fit your taste or budget, it remains the benchmark by which all other cars in the class are judged. Assuming BMW’s engineers didn’t screw it up this time around, that mark just moved further away.

They didn’t, and it did.

Although it doesn’t look like it from the outside, this is a substantially different car than the one that it replaces. It’s longer, lower, wider and lighter, but retains the 3-series traditional 50/50 weight distribution, or as close as it gets.

A newly-stretched wheelbase is very evident in the cabin, where the 3-series offers the kind of front and rear legroom found in the midsize 5-series not long ago. In sharp contrast to the straightforward exterior, the interior design is a creative collection of asymmetrical surfaces that wrap over and under one other, intersected by flat planes and lines made from bold wood, metallic and painted surfaces. The combination of matte red plastic and brushed aluminum in the Sport model tested here giving it the air of a grown-up Nintendo NES controller.

Your traditionally dreary German sports sedan this is not.

Currently available only as a four-door (the last generation coupe, wagon and convertible models will soldier on for a bit longer) in 335i and 328i versions, the latter is the more popular and interesting of the pair with a starting price of $35,795.

Powered by the same turbocharged 2.0L four-cylinder engine used in the 528i and Z4 sDrive28i, the 328i is the first 3-series with less than a six-cylinders under the hood since 1999.

It’s no surprise that this is all about fuel economy. The six-speed manual 328i has an EPA highway rating of 34 mpg, while the 8-speed automatic gets 33 mpg, improvements of 6 and 5 mpg respectively. As cool as all those gears sound, however, this is a driving machine of the ultimate kind and you’ll want to go for the stick to get the full effect, as we did.

Fret not, power brokers, with 240 hp and 260 lb-ft of torque, the downsized engine offers more of both than the 3.0L inline-6 it replaces. It is also fitted with a stop/start system that shuts it off when the car is stationary and starts it again when you press down on the clutch. It happens quickly, but with more of a shudder than it should. If Chevy can do better with its Malibu Eco, so can BMW. File this one under ‘needs work’ or perhaps ‘deliberate imperfection’ in the vein of a master carpetmaker.

The rest of the experience isn’t quite perfect, but it sure is close. The 328i is as quick as it needs to be and the engine pulls strongly from idle with a rich, but hushed sound. The version in the Z4 plays a more raucous tune out of its exhaust pipes, which might be welcome here, but most customers will appreciate the quietude.

The driving position is better than some true sports cars I can think of, and there’s comfort to be had all around. Ride quality is spot on, aided in part by the extra distance between the wheels, but also enhanced by a new suspension design that features double wishbones in the front, in place of the 3-Series’ traditional struts.

The $2,500 Sport Line package brings with it the option to add a $900 active suspension that works with the standard Driving Dynamics Mode to change the character of the car by adjusting the throttle and steering responses along with the suspension stiffness and stability control through a range that runs from Eco to Sport +.

Driven as it should be while in the last of those settings, the 328i is more balanced than Germany’s budget, which has a deficit of less than 1 percent, so that is impressive. The electrically-assisted power steering offers good feel, and with all of that torque the car can be steered with the throttle quite nicely. The new 3 may have been bred for work on the Autobahn, but curvy roads are where it likes to play.

Nevertheless, it can be outfitted quite nicely for the daily slog with everything from a Pandora and Facebook-enabled infotainment system to radar cruise control and a trunk that can be opened by passing a foot under the rear bumper. Consumption isn’t always conspicuous, however, and optioned up it is not hard to run the price of the 328i to well over $50,000. That’s par for the course in this league, but any competitors willing to join a foursome with the 328i had better bring their A game.

Apparently, good things still come in small packages, even if they’re slightly larger these days.

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2012 BMW 328i

Base Price: $35,795

Type: 5-passenger, 4-door sedan

Engine: 2.0L turbocharged inline-4-cylinder

Power: 240 hp, 260 lb-ft torque

Transmission: 6-speed manual

MPG: 23 city/34 hwy