The award was decided by 47 motor journalists from 24 countries and was announced at the New York International Auto Show 2008.
The three- and five-door BMW 118d recorded 4.5 l/100k, (62.8mpg) on the combined cycle with CO2 emissions of 119g/km.
The car uses 'EfficientDynamics' technologies such as Brake Energy Regeneration, Auto Start-Stop and Electric Power Steering to cut fuel bills and emissions. An optimum gearshift change indicator is included to encourage economical motoring.
The World Car of the Year Awards were inaugurated in 2003.
