The 40th birthday of the BMW 3 Series is no big deal. There is a new nose and tail, extra bling in the cabin, 4G connectivity, improved engines that promise better performance and fuel economy and tauter suspension with improved dampers.

A plug-in hybrid is also coming next year. But the big switch, and a car to challenge the Mercedes-Benz C-Class that is romping ahead with prestige buyers in Australia, is still in the future.

A new 7 Series flagship is coming towards the end of this year. Australian designer Calvin Luk has done design updates for the 1 Series and X3, but the 3 Series is only a mild evolution despite the hype at company headquarters in Munich.

"We are enriching the 3 Series with new cutting-edge engine technology. We can offer a fuel efficiency improvement of up to 13 per cent," says BMW Group global marketing chief Ian Robertson.

He says the focus is on agility and dynamics as BMW defends the global market leadership it has held since the 3 Series's debut in 1975.

"We fully intend to maintain this position. The sedan segment is still strong despite what everyone is trying to intimate, and the Touring (wagon) works well in Europe.

"I think sedans have a long way to go. Our core is still rear-wheel drive and sedans."

The 3 Series update will reach Australia late this year, after European sales begin in August, but there is no prediction yet on pricing or the final engine line-up after the mid-cycle change.

The new engines are led by the four-cylinder petrol powerplant in the 330i that makes 135kW and best fuel figures from 5.3L/100km. The 240kW inline six in the 340i returns at best 6.6L/100km.

All the 3 Series engines below the M3 — three, four and six-cylinder petrol and four-cylinder diesel — now come from the Efficient Dynamics engine family, boosted by turbos. The plug-in hybrid, the 330e, promises economy of just 2.1L/100km despite making 185kW.

We've done subtle but effective changes

On the technology front, in addition to 4G there is an updated Professional satnav with the prospect of quicker route calculation and free map upgrades "automatically over the air in the owner's home region" for three years.

Visually, the 3 Series has a sharper nose with more LED work and tail-lamps with a slightly different shape. In the cabin, there is more soft plastic and extra chrome trimming.

"We've done subtle but effective changes. It's about quality and precision," says BMW design chief Karim Habib.

BMW talks big about the history of the 3 Series, with sales totalling more than 14 million cars.

There was a historic line-up of all six generations outside its Munich headquarters for the update event.

Robertson says the big party is coming next year, though he won't be drawn on the possibility of landmark concept cars or even a 3 Series with more improvements.

"We are going to do some celebratory 100-year cars next year," he says, alluding to BMW's centenary.

Check out Malcolm Flynn's video review of the BMW 3 Series:

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2023 BMW 330I M Sport G20 LCI