IF IMITATION really is the ultimate form of flattery, then BMW's 3 Series has probably generated more automotive obsequiousness than any other model.

Launched last week and available for test drives from May 27, the fifth-generation E90 will compete with no fewer than 18 compact premium sedan rivals when it goes on sale in Australia from June - up from 14 in 2000 and just 10 in 1995.

Following a model lineage spanning three decades and four generations, 3 Series has become both the backbone of one of the world's most profitable car companies and the yardstick against which compact premium sedans are now measured.

Despite unprecedented competition the current E46 model was easily the most popular 3 Series ever, with 3,141,330 versions sold worldwide to February and at least 35,000 expected to be bought in Australia before it's sold out. Its E36 predecessor attracted 26,114 customers here between 1991 and 1998.

With a staggering 9.59 million examples built since BMW created the small luxury sedan class in 1975 (including around 108,000 in Australia since 1977), it's easy to see why every serious car-maker wants a piece of BMW's lucrative 3 Series action.

Rivalry in the prestigious Luxury car segment reached new heights last week, however, when on the eve of BMW's E90 launch Mercedes-Benz issued a 'spoiler' press release announcing its C-class sedan will be offered with class-leading 200kW 3.5-litre V6 performance later this year, gazumping the 190kW output of the new R6-series 3.0-litre engine in the new 330i sedan.

Mercedes-Benz also pointed out that C-class - traditionally 3 Series' fiercest rival - is currently Australia's top-selling luxury car, having attracted 1313 sedan and wagon buyers to April this year for 13.2 per cent of the segment.

BMW, meantime, has sold 1282 sedan and wagon versions of its 3 Series, representing a 12.9 per cent share.

Similarly, while BMW has sold 170 3 Series convertibles and 326 coupes (which will continue on sale until their replacements arrive late next year), Mercedes has notched up a further 602 C-class-based CLK coupe and convertible sales.

Throw in 317 Sport Coupes, for which BMW has no rival, and C-class's 2005 sales lead grows further.

Of course, BMW counters by pointing out that 3 Series sedan (5003) comprehensively out-sold C-class sedan (4038) last year, that it's still eight per cent up on 2004 numbers despite being in run-out and that BMW will outsell Mercedes overall this year.

"While others stumble we go from strength to strength," said BMW managing director Franz Sauter. "In 2004 we sold more 3 Series models than some of our luxury competitors sold across their total ranges.

"If you put your money on BMW (claiming luxury market leadership this year), then it's a smart move," he said.

Regardless of how the numbers are carved up, it's clear BMW has a lot riding on its new 3 Series.

Wearing new sheetmetal that features hints of the Z4's "flame surfacing" and the 5 Series' angular lighting elements but is altogether more conservative, the replacement for BMW's volume seller is 49mm longer, 78mm wider, 6mm higher and 25 per cent more torsionally rigid - but no heavier.

Riding on a 35mm-longer wheelbase (now the longest in class at 2760mm) and with 29mm-wider wheel tracks (1500mm front, 1513mm rear), the latest Three features new aluminium front and five-link independent rear suspension.

BMW claims 20 litres of extra boot space, but run-flat tyres replace a spare tyre across the board.

Opening the range at $49,900 is the 320i, which replaces the 318i. Expected to be the volume seller, the 320i Executive is priced at $54,600 and, like the basic 320i, comes standard with a six-speed manual mated to a 110kW/200Nm Valvetronic and Double-VANOS-equipped 2.0-litre four-cylinder.

Offering 5kW more peak power than the outgoing 318i, the 320i is also claimed to be faster and more fuel efficient than its nearest rivals.

The mid-range 3 Series sedan is the 325i which, when it's available in August, will come with a 160kW/250Nm 2.5-litre version of BMW's new magnesium-alloy N52 six-cylinder. It will be priced at $71,900 in manual guise and, like both 320i variants, will be available with a six-speed sequential-shift auto carrying a $2600 premium.

The auto-only 330i tops the range, for now, priced at $96,500 and powered by a 190kW/300Nm 3.0-litre N52 inline six.

Inside, the slightly larger E90 cabin offers 26mm more shoulder room, 7mm more front headroom, 19mm more rear kneeroom and an extra 13mm of fore-aft front seat adjustment.

All E90 3 Series models come with a start/stop button, new-generation dual-zone climate control, multi-function steering wheel, cruise control, Bluetooth compatibility, traction control, stability control, cornering brake control, dynamic brake control, auto headlights and wipers, two-stage brake force display, twin front/side/curtain airbags, and four seatbelt pretensioners.

On top, the 320i Executive offers 16-inch alloy (instead of steel) wheels, Dakota leather trim (instead of cloth/leather), no-cost interior trim options (instead of the 320i's titanium matt finish), plus front foglights and exit/doorhandle lighting.

In addition, the 325i offers ventilated rear brakes, 17-inch alloys, DSC with advanced braking features, chromed grille, rear park assist, powered seats with driver's memory, centre armrest, through loading system, cruise control with brake function, six-CD changer and anti-dazzle interior mirror.

The flagship 330i's extra kit includes unique 17-inch alloys, front park assist, lumbar support, digital compass, 10-speaker audio, adaptive bi-Xenon headlights, Business satellite-navigation and iDrive.