JUST how happy new car consumers really are with BMW’s radical new styling directions will only be determined in the long term, but the new 5 Series is so far not doing anything spectacular with conquest sales since it was launched here in October 2003.

There are plenty of underlying reasons for this – a fairly limited range of variants, supply issues – but this far into the new E60 5 Series, BMW would surely have liked to be outselling Mercedes-Benz E-class.

So far, not so. 5 Series sales into the second half of 2004 were lagging behind the E-class - even if BMW overall is well ahead of its only serious luxury competitor.

This is something less than you’d normally hope for a car judged by many to be the best in its category, especially in the heady days of its new-to-market freshness.

Apart from its looks, the latest 5 Series has everything going for it.

Against Mercedes-Benz, it is priced sharply, equipped competitively and, importantly, has gained ascendancy over the previously all-conquering E-class in terms of passenger space.

Dynamically, it comes closer than anything in living memory to achieving the perfect compromise between handling, roadholding and ride comfort.

All this makes the new 5 Series one of the best sedan cars on the planet – a benchmark for anyone serious about staking a claim in the luxury market.

And none of this is diluted at 5 Series entry level, where the 525i is priced comfortably below the base E240 Classic Mercedes and barely above luxury class aspirants Peugeot (607) and Alfa Romeo (166).

Not only do you get the BMW badge but, in comparison with Peugeot and Alfa Romeo, you are not asked to pay extortionate amounts of money for it.

Comparing the 525i with the first 5 Series to be launched – the 530i – the most immediately obvious shortfall comes in the engine compartment where 2.5 litres is asked to do what 3.0 litres does so wonderfully in the 530i.

Power drops from 170kW to 141kW while, even more importantly, torque drops from 300Nm to 245Nm.

But revisions to the final-drive ratio and smaller 16-inch wheels help the 525i do the job - although at 8.7 seconds from zero to 100km/h it’s certainly less accelerative than you might normally expect from a six-cylinder BMW.

The engine is basically a short-stroke version of the 3.0-litre. It gets the Bi-Vanos valve management system that continually alters the timing of valve opening and closing to maximise torque and power, as well as the usual twin overhead camshafts and four valves per cylinder.

The specific power outputs place it on a par with the 3.0-litre for its capacity, although there may be a slight loss in torque characteristics due to the shorter-stroke configuration (long stroke generally equals more torque).

But the engine hooks up to the smooth and efficient six-speed ZF auto now adopted by so many car-makers. This plays a big part in ensuring the 525i is never short of gearing to provide acceleration when it’s needed.

In terms of equipment, the 525i is pretty close to the 530i, although it loses out incrementally not just in engine size and performance figures, but also in wheel diameters, which drop from 17 to 16 inches.

And although it gets twin power seats up front, the driver misses out on the memory function seen in the 530i, as well as part-distance sensors and anti-dazzle interior and exterior rear-view mirrors.

If you don’t like the fact that the 525i uses a space-saver spare, you’d like the 530i’s run-flat tyres even less – even if it does mean more space in the boot.

The 525i gets all eight airbags (dual front, full-length curtain and sidebags front and rear) as well as all the usual BMW electronic dynamic safety aids contributing to an acronym-laden specification list.

This includes such niceties as ABS, CBC (cornering brake control), ASC (described as "Automatic Stability Control monitoring wheel spin and, by applying the brakes selectively on the respective wheels, preventing a drive wheel from spinning through an effect similar to that of a limited-slip differential"), DSC ("Dynamic Stability Control enhances driving safety in abrupt manoeuvres or in the early phase of instability in bends, and especially on slippery roads by applying the brakes on specific wheels"), DTC (Dynamic Traction Control), DBC (Dynamic Brake Control) and optional Dynamic Drive (which is basically a watered-down version of active suspension in that it helps the car maintain a level stance when cornering).

Driving the 525i, most impressions are quite similar to what you’d experience in a 530i - the harmonious engine note, the almost imperceptible shifting of the six-speed sequential auto and the smooth, controlled ride.

Although the acceleration figures are not that impressive, the 525i never feels short of power and will quickly gather speed to join freeway traffic from a feeder lane, or overtake a slower car.

The economy is pretty good too, easily dropping below 10 litres per 100km on the open road. BMW’s quoted average of 9.9L/100km is pretty achievable.

Then there’s BMW’s speed-sensitive active steering that reduces the number of turns lock-to-lock at parking speeds to less than two.

It provides go-kart like response in most cornering situations, although – and maybe it’s a matter of familiarisation and maybe the system responds more appropriately to the 530i’s larger wheel-tyre combination - the 525i’s steering did feel a little less "natural" than the bigger engined car.

Never a problem, but in this case the 5 Series seemed to lack the razor-sharpness remembered in previous experiences.

But the test car did come with the optional adaptive headlight system, which virtually sees around corners to help give better night vision. It’s not new (Citroen used it in the early 1970s) but it works, swivelling the lights with the steering wheel to provide an expanded field of illumination that doesn’t worry oncoming drivers.

Far from suffering as a watered-down 530i, the 525i showcases the qualities of the new 5 Series in a way that doesn’t mean any huge sacrifices.

From the passenger’s perspective, it’s just as roomy, just as comfortable and feels much the same on the road – in fact maybe with a slight ride improvement resulting from the less aggressive wheel/tyre combination.

Less of a driver’s car, but still fundamentally a car to be enjoyed.