By John Griffiths, industry correspondent, Business Car Manager

WALTER Hasselkus, one of the most likeable fellows ever to opt for a career at BMW, looked at me solemnly from across his managing director’s desk at BMW’s then-modest Bracknell headquarters.

“I believe the time will come when BMW can achieve a 2 per cent market share in the UK. And that, maybe, ought to be enough if we are not to lose our exclusivity as a premium brand.”

His observation was made shortly after dinosaurs had ceased roaming the earth. OK, I exaggerate about the dinosaurs; but it was way back in the early 1980s, not long after BMW itself had taken over the UK distribution franchise it had formerly contracted out to the independent dealership group, TKM.

Oh for a crystal ball, eh, Walter?

The SMMT’s recently-published figures for 2011 show that BMW 3 Series sales alone, at 42,471, took 2.2 per cent of a bigger than expected total UK market of 1.941m. Total BMW brand sales reached 116,642, or a 6.1 per cent market share – and you still have to add on more than 50,000 MINI sales (a 2.58 per cent share) and a few hundred Rolls-Royce sales to reach the full group market share of 8.65 per cent.

Makes that 2 per cent threshold look a bit unadventurous now, doesn’t it Walter? (Hasselkus, after a lengthy and ever more distinguished career at BMW, has subsequently moved on to auto industry pastures new.) But at the time no BMW chief or auto industry analyst would have dared to predict anything like the scale of growth now being enjoyed across the world by the Munich-headquartered car maker.

Crucially for the long term financial health of BMW, as February 2012 gets under way, that growth will begin to receive yet further major stimulus – from the launch of the F30, BMW’s designation for its latest, new-almost-from-the-ground-up 3 Series saloon.

It will be driving into a market turned topsy-turvy since the time Hasselkus was speaking.

When Ford ruled the fleet car market Back then, Ford’s 30-odd per cent market share was viewed by the fleet world as virtually a God-given right. Vauxhall’s second place was strong enough to give the top two car makers pretty well half the market between them.

Imports were a relative sideshow and Peugeot, having bought Chrysler’s crashed European operations, was meanwhile, cringeingly and thankfully briefly, busy renaming everything Talbot.

Who really would have envisaged that, measured by group rather than brand sales (thus taking in Audi, SEAT, Skoda, Bentley, Lamborghini and even Bugatti) Volkswagen in 2011 would be the soaraway UK market leader with a share nudging 20 per cent? That Ford, having flogged off crown jewels like Jaguar and Land Rover, would be trailing behind on 13.8, only just ahead of General Motors’ Vauxhall and Chevrolet? And that the combined might of the Peugeot and Citroen brands would be slugging it out for market share virtually head to head with…good Lord, yes, the BMW group.

The supposed French volume car maker is now, indeed, starting actually to fall behind the German prestige manufacturer. Just as remarkably, the current 3 Series itself is ranked eighth in a list of the UK’s ‘top ten’ best-selling cars populated almost entirely by smaller, much cheaper vehicles.

And where are those supposed epitomes of the mainstream British fleet market, Ford’s Mondeo and Vauxhall’s Insignia?

Well, actually the Insignia did pretty well, winding up as the sixth best seller – but still less than 4,000 units ahead of the BMW Series. Meanwhile the Mondeo languished with only just over 20,000 units, with little prospect of doing much better this year. Relief is likely to come only at the start of 2013, when the new all-new ‘Fusion’ Mondeo ‘world car’ is launched. It is the first time European business users will be offered a core fleet and business car that has been developed in North America. Given the North American industry’s dismal track record of engineering cars with the ride, braking and handling prowess of an Admiral’s Cup contender, there will be quiet prayers at Dagenham Towers that Dearborn finally gets one right.

On a global scale, if 2010 sales figures are anything to go by – and BMW executives say they believe strongly that they are – then once in full supply the new BMW 3 Series saloon alone will end up accounting for at least 20 per cent of BMW’s total group sales (including MINI and Rolls-Royce).

The 3 Series Saloon is just the start Adding in the BMW 3 Series variants that will follow – coupes, estates (or Tourings in BMW-speak), convertibles and so on – is expected to lift the BMW 3’s total share of sales to at least 35 per cent. Viewed strictly in percentage terms, neither is a great step up from the current 3 Series – but between last year and 2015 BMW intends to increase its total sales by at least 350,000 units a year to 1.8m, so the F30 range is being tasked with finding well over 100,000 extra yearly sales around the world.

No wonder, then, that BMW bigwigs like F30 design chief Udo Haenle and the first Brit ever to make BMW’s main Board, global sales supremo Ian Robertson, are nail-bitingly anxious that the new 3 can build further on the world-wide success of the generation that has preceded it.

The 3 Series regains its driver’s edge With media driving impressions completed – including, as a demo of BMW’s confidence, flat-out sessions around Spain’s Catalunya Grand Prix circuit – agreement appears to be near-unanimous among motoring hacks that the new BMW 3 Series is well up to the task and that it is destined to restore much credibility to BMW’s self-proclamation as the maker of ‘ultimate driving machines’.

That claim – of being the ultimate driving machine – recently has come under increased challenge, embodied in criticism of the type which met the woolly-steering Z4 sports car and, more recently, the latest rear-drive 1 Series and its perceived ride and handling shortcomings. (The next-gen 1 Series will go front wheel drive, like everyone else.)

Not only did the new 3 encounter plaudits for its dynamics, however; its aggressive styling allied to increased passenger and boot space were predicted not just to go down very well indeed with traditionally loyal 3 Series buyers but to be well capable of luring both business and private users out of rival-brand premium executive cars.

But it is the structure of the model range – its breadth, comprehensiveness and low CO2 figures (for which read superior fuel economy and lower company car taxes) – that is certain to grab the attention of fleet managers and business users. Mr BCM Editor Morton has already described the range in very great detail – New BMW 3 Series launches with sub-110g/km model – but it is worth recalling that around 20 versions will fall below the 120g/km CO2 threshold so important to business users in terms of BIK (benefit in kind) and VED (road tax) benefits, while the ultra-frugal 320d EfficientDynamics model will combine a mere 109g/km – and 100 per cent first year allowances – with an EU-rated combined fuel consumption of 64.2mpg. A hybrid is also due for launch next year.

Don’t get too carried away, though – powertrain chief Peter Nefischer says there won’t be a congestion charge-cheating sub-99g/km BMW 3 Series anytime soon.

Big budget development BMW has spent more than £1bn on developing the 3 Series saloon alone, with at least as much again being spread over estates, coupes, convertibles and other derivatives using the same basic engineering architecture. Given the core importance of the 3 Series (12.5m already sold) to BMW’s profit and loss account we should not be too surprised. But then it really can afford it.

Its profit margins are the envy of a global volume car industry whose margins remain uncomfortably thin or, like GM, just being rebuilt after brushes with bankruptcy. Even in last year’s depressed final quarter BMW was making around 12 per cent; its pre-tax earnings of Euro 1.7bn for the quarter way above forecasts and riding on the back of sustained profitability despite the past few years of global economic drama.

The prestige car battle for your business pound BMW’s other two main prestige sector rivals, Audi and Mercedes-Benz, have also been consistently in the black and on mainly good margins: Audi at 13.1 per cent and Mercedes at a somewhat less lustrous (and likely to prove only a brief blip) 8 per cent. With its new A4 model due to enter the UK business car market just a month behind the 3 Series, the stage is set for a battle royal in the compact executive prestige car sector.

For Audi, too, is on a roll: its own share having jumped to nearly 6 per cent of the UK market. And Mercedes – whose own share last year broke above 4 per cent – is waiting in the wings with a new C-Class rival coming in over the horizon.

The lesson seems self-evident: car buyers, even in recession, will pay a premium for a premium badge; add in zealously-guarded residuals, low CO2 emissions and the resulting competitive leasing rates and business users will be queuing at the door. It is a lesson which has resulted in the three brands now accounting for almost one in five of new cars sold in a market where more than 60 manufacturers are jostling for sales.

Sales success and declining exclusivity But, as Walter once feared, is this becoming a success story too far?

In the same way that the sheer volumes of the once lusted-after Porsche 911 has made it all but invisible on UK roads, what price the ‘prestige’ of a BMW, Mercedes or Audi when every middle-class driveway has one?

BMW chiefs argue that by tapping into every known sector with a premium model, and even inventing a few sectors of their own, the prestige car makers can continue to grow without threatening exclusivity. Like the Billy Bunteresque MINI Countryman, the MINI Coupe and the BMW X6 Coupe, eh, BMW?

They’ll love ’em in China.

Read John Griffiths’ road test of the new BMW 3 Series

Click here: New 3 Series to send divorce rates soaring.