BMW released an updated version of the 1-series compact late last year and since then a suspicious prototype of the hatch has been captured running around German streets. At first appearance the car looks like an ordinary 1-series hatchback but look closer and you’ll notice several key features that reveal it is very different. Now new information about the next-generation car has just been revealed by Klaus Draeger, BMW's product development guru, indicating that a 'shooting brake' elongated two-door wagon/hatch variant may be in the works.

Noting that it's very tough to find a way to expand the 1-series lineup without impinging either on Mini's sales at the lower end or on the 3-series sales above, Draeger says he only sees one new body type as having a serious chance at production, according to a report in AutoBild. The two-door wagon shooting brake design is what BMW calls a 'lifestyle' vehicle, meaning it adds a dash of practicality to what would otherwise be a small coupe. But Draeger's also quick to point out that nothing has been decided, and a new model will only be added if it can be determined to draw in new customers.

No M model is planned for the next-gen 1-series either, despite strong enthusiast interest. Again balancing the 1-series' position within the lineup and the potential to draw in adequate new customers is the basis for the decision on the M-car. A few additions that will improve performance of the next-gen car are planned, however, including the expansion of direct injection throughout the engine lineup, plus the inclusion of the dual-clutch gearbox as well, beginning with the more powerful models and slowly working throughout the range.

The car pictured here is in fact an early test-mule for the next-generation 1-series hatch most likely due in late 2011 or early 2012. Makeshift fender flares reveal the new model will sport a widened track both front and rear, confirming the next 1-series will be bigger than the current model. The larger footprint will also improve the car’s dynamics and road-holding abilities.

Earlier this year BMW CEO Norbert Reithofer revealed that the four-cylinder engines used in the next-gen 1-series will be the same compact units developed jointly by BMW and France’s PSA Peugeot-Citroen for the Mini and a number of French models. The engines will range from 1.4 to 2.0L in displacement and will be available in both turbocharged and naturally aspirated forms. Expect to see BMW’s award-winning straight six engines also appear in the line-up. Engines could be downsized somewhat to meet more stringent emissions and fuel economy rules, but with the aid of the direct injection and forced induction, power figures may not decrease substantially, and could even increase in models like the 135i.

The current 1-series has often been criticized for having a back seat no full-sized adult would be comfortable in, however the rear seat room in this new model is expected to be much improved. This will also allow BMW to finally release a hatchback version of the 1-series in the all-important US market. This 1-series should also help boost BMW's sales in emerging markets due to its low entry price.

Expect to see stop-start and electrical-regenerative systems carry over into the new series as well as possible new EfficientDynamics technologies such as heat-recovery systems and solar panels. BMW has also revealed that initial testing of thermoelectric generators and solar panels on its cars showed savings of up to 5% in fuel consumption.