In fact, the 1-Series M Coupe is widely considered the only real successor to the E30 M3. So BMW has to reconsider what the smallest sedan they offer can be, and according to Autocar a smaller 1-Series sedan is coming.
The car will be a rival for the upcoming Audi A3 sedan and Mercedes CLA four-door coupe, so BMW can get away with creating a budget car based on the modular front-drive platform used by the upcoming 1-Series GT and MINI Cooper.
But for now, rumors indicate that the 1-Series sedan will be rear-drive and offer even the top-most 135i straight-six option.
Expect this interesting newcomer to arrive after the coupe and convertible, most likely in 2015.