Before 1994, the last time when BMW offered a hatchback was between 1971 and 1972 with the Touring version of the 1600 series.
And it was not a success. But for the 1994 model, it was a different story.

In 1994 there was no premium hatchback on the market, but the hatchbacks market share in the compact segment was big. So, BMW tried the market with a car that was based upon two different 3-Series models on a 3-door hatchback bodywork.

The first generation of the 3-Series compact was launched in 1994 to get the premium customers from the hatchback segment. The front of the car was identical to the BMW 3-series from the third generation (E36). But from there on, it was a mix of new and old parts. The rear suspension was taken from the second 3-Series generation (the E30). The doors were different than the rest of the E36 range, even though they looked the same. The rear windows were hinged in the front so they could open a little. The tailgate and the rear end were different than any other BMW vehicle of those days.

The interior featured a dashboard inspired by the E30 and with some parts taken from that generation. The front seats were from the E36 coupe and the rear seats could have been folded in a split 60/40 manner.

Under the bodywork, there was an E36 front suspension and an E30 rear suspension. It featured only fuel-injected engines, with displacements that varied from a small, 1.6-liter unit to the top-of-the-range 2.5-liter inline-six unit. It was available with a standard 5-speed manual or a 4-speed automatic.