This includes the options of iDrive and voice control, a Bluetooth cell phone interface and parking aids, items normally found on larger, luxury models.
The 1 series will appear in European showrooms from September as a five-door hatchback, with the 115hp base model priced at below 20,000 Euros.
Further engines will include the 120i with 150hp and two diesels, 118d (122hp) and 120d (163hp). A turbo version with up to 250hp will follow later.
Panke said it was important the 1 series is seen to have "higher product standards" than rivals such as the Volkswagen Golf.
He added: "With its dynamic driving properties, this car will bring a completely new driving experience to the segment."
The 1 series will be built at BMW's Regensburg plant near Munich. Peak capacity of between 100,000 and 150,000 units could be achieved within just three months.
Some models may also be assembled at BMW's new Leipzig factory in the future.
The 1-series hatchback will not be sold in the USA, according to Panke. "Over there, there are no hatchbacks with a premium image," he said.
But a coupe-style, three-door version and a convertible model could be launched in North America around 2006.