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BMW is mulling a sub-3 Series front-wheel drive sedan, according to an Automotive News Europe report. Bearing the internal working title NES (New Entry-level Sedan), the new four-door model will counter the Audi A3 Sedan and Mercedes-Benz CLA when it surfaces in 2017.

Speculated to be the upcoming BMW 1 Series sedan (current F20 1 Series pictured), the NES will ride on the company’s new UKL (Unter Klasse, or entry-level) platform, which you’ll see first at the LA show in November – underneath the new F56 MINI hatch. It will also underpin the third-gen 1 Series hatch, before the sedan.

“(The NES) will be an important pillar in the future BMW 1 Series lineup, particularly in the US and China, where sales of small premium-brand sedans are on the rise,” an insider source told ANE. The report adds that like the competition, the car will be offered with four-wheel drive as an option.

After preliminary guidelines are set for the new model, an official codename will be issued when it enters the test and development phase, BMW sources told ANE. Where the BMW 1 Series sedan will be built has not been divulged, but according to the report, sources suggest facilities in Germany, China and possibly Brazil.

Motivation will reportedly come from direct-injected three- and four-cylinder petrol and common-rail diesel units. A plug-in gas-electric hybrid powertrain could possibly surface in the future, as part of BMW’s EfficientDynamics vision.

Usual coupe, cabriolet and hatchback (three- as well as five-door) bodystyles aside, the third-gen BMW 1 Series range is also expected to include an MPV variant – check out what is referred to as the 1 Series GT here. The current second-gen 1 Series is about to be facelifted; see the F20 LCI here.