Cafe Society Racer: The BMW E30 M3

Even drivers who don’t consider themselves car nuts (or enthusiasts, if you will) often love the idea of owning a car that feels like a real race car, whether for the bragging rights or just to pretend that the freeway ramp is really a turn at the Nürburgring. Of course, real race cars are usually rough, noisy, temperamental, and fussy in a way few would care to tolerate on a day-to-day basis, but many buyers happily lay out serious money to indulge their Walter Mitty fantasies.

By those standards, there are few cars more desirable than the E30 version of the BMW M3. Not only does it look like a track car, it’s a hardcore “homologation special” whose track-bound brothers dominated touring car racing throughout the late eighties and early nineties. It’s not the fastest of its kind, but there are still those who will swear to you that it is the best. This is its story.

1989 BMW E30 M3 tail badge


Why do automakers go racing? For most companies, it’s a combination of ego and marketing ambition — the hope that success in competition will provide positive publicity and spark sales, the old cliché, “Win on Sunday, sell on Monday.”

BMW’s competition history goes back to the 1920s, but the company’s direct involvement with racing has been on and off. In 1971, new BMW chairman Eberhard von Kuenheim decided that BMW should again take a more active, organization role in competition. He tasked BMW’s new sales director, Bob Lutz — a Swiss-born American who had been an executive with GM’s European operations in the sixties — to develop a new racing organization.

Rather than create a competition division with BMW, von Kuenheim and Lutz opted to start a separate, subsidiary company, BMW Motorsport GmbH (now called simply BMW M). BMW Motorsport was incorporated in May 1972 and Lutz hired two former Ford racing managers, Jochen Neerpasch and Martin Braungart, to run it.

Ford’s experience in the sixties had demonstrated that throwing vast amounts of money and resources at ‘works’ teams did not necessarily translate into victory. BMW decided that rather than fielding factory teams, BMW Motorsport would instead develop and sell racing parts and technical support to independent teams. The highlight of Motorsport’s early efforts was the formidable 3.0 CSL “Batmobile,” which scored strongly in the mid-1970s, although it was not until a few years later that the company gave serious thought to designing cars of its own.


The first car to wear the Motorsport M badge was the BMW M1, a mid-engine coupe intended for competition in the FIA’s Group 4. Known internally as the E26, the M1 was based on a mid-engine show car designed by stylist Paul Bracq in 1972, restyled by Giorgetto Giugiaro. The E26 project began in 1974, but its gestation was protracted and troublesome. Motorsport had intended to contract production to Lamborghini, but when that fell through, the bodies were built by Giugiario’s Italdesign and assembled by Karosserie Baur in Stuttgart. It took so long to produce the 400 cars necessary for racing homologation that by the time the M1 was finally homologated in 1981, it was no longer really competitive.

1980 BMW M1 front 3q
Nelson Piquet’s BMW M1 at the Nürburgring, May 24, 1980. 455 of these cars were ultimately built, although their competition record was disappointing. (Photo: “1980-05-24 Nelson Piquet im BMW M1, Nürburgring Südkehre” © 1980 Lothar Spurzem; resized and used under a Creative Commons Attribution-ShareAlike Germany 2.0 license)

The M1 was best described as a modest failure and its most significant legacy was its engine, the M88. Developed by Motorsport’s Paul Rosche, it was based on the big straight-six used in BMW’s contemporary sedans and coupes, but bored out to 3,453 cc (211 cu. in.) and fitted with new 24-valve cylinder heads and dual overhead camshafts. In street form, the M88 made 277 hp DIN (204 kW), a healthy increase over the 200 hp (149 kW) of the ordinary 3,210 cc (196 cu. in.) six. Normally aspirated racing versions averaged around 480 hp (350 kW), with as much as 900 hp (660 kW) in turbocharged form. Subsequent versions of the M88 and its S38 derivative, would be used in BMW performance cars well into the 1990s.


As Motorsport struggled with the M1 project, BMW was enjoying the fruits of its most successful mainstream product, the first 3-Series (known internally as the E21). Launched in May 1975, the 3-Series was a modest evolution of the 2002: conceptually similar, but a little bigger, a little softer, a bit more refined, and significantly more expensive than before. It was hugely popular, however, accounting for more than half of BMW sales.

At first blush, the success of the 3-Series BMW was not easy to grasp. It was a fine car in many respects — a compact, well-built little sedan with excellent handling and commendable fuel economy — but it was also Spartan, cramped, had a relatively stiff ride and cost nearly as much as a Cadillac Sedan de Ville. To an older generation of American buyers, bred to associate luxury with size and plushness, the 3-Series was hardly appealing, but for upwardly mobile Baby Boomers, it soon became a status symbol. A 320i was a natural step up from nimble compacts like the Volkswagen Golf, Honda Accord, or Fiat 128, offering most of their virtues without the stigma of low price or plebeian badge. More than a million 3-Series cars were sold between 1977 and 1982.

1989 BMW E30 M3 side
The E30 version of the BMW 3-Series is a relatively compact car: stretching 176.8 inches (4,491 mm) long on a 101.2-inch (2,571 mm) wheelbase, it’s only a slightly larger than an early-eighties Honda Accord. Those dimensions keep the E30’s weight low and its handling good, although the rear seat is rather cramped. The M3 weighs around 2,850 pounds (a bit under 1,300 kg).

Not wanting to tamper with a successful formula, BMW’s second-generation 3-Series (known internally as the E30) was a conservative update of its predecessor. Launched in Europe in the spring of 1983, the new E30 3-Series was almost the same size as before, with a cautious facelift orchestrated by BMW design chief Claus Luthe.

The only thing that changed significantly was the price, which was even more daunting than the E21’s. A U.S.-spec 318i started at around $16,500; with a full load of options, it ran more than $19,000. By comparison, a Honda Accord SE-i, roughly the same size, with similar power, could be had for about $6,000 less. The Honda couldn’t match the 318i’s solidity or adroit handling, but the price gap indicated how much customers were prepared to spend for the prestige of the BMW roundel and the upscale performance image it implied.


In 1983, BMW decided to give the performance image of its production cars a shot in the arm by offering Motorsport-tuned versions of its standard cars. The first of these was the M635CSi (known in America as the M6), a high-performance version of the E24 6-Series coupe, followed in February 1985 by the E28 M5, which installed the M1’s DOHC M88 engine in the midsize E28 5-Series. The new engine and associated chassis tuning gave the somewhat staid 5-Series and 6-Series cars startling performance. Both M635CSi and M5 sold in limited numbers, but they earned BMW a great deal of publicity and added luster to the lesser models in the line.

1989 BMW E30 M3 front 3q
The interior of the BMW E30 M3 was dressed up with a Motorsport steering wheel, sport seats, a 160-mph (256 km/h) speedometer, and an oil temperature gauge in place of the usual BMW fuel economy gauge. Even with the M3’s sport seats and (in U.S. form) standard leather upholstery, the interior was far from plush, although that was certainly more appropriate for the M3 than the standard 325i, whose interior trim was not in keeping with its substantial price tag.

An M version of the popular E30 3-Series was a natural follow-on. Motorsport first proposed such a car in 1981, but serious development was not approved until after the launch of the E30 in 1983. The project took on a greater urgency that summer when Mercedes-Benz’s introduced its compact 190E (W201) sedan, a direct rival to the 3-Series. Along with the 190E came a high-performance version, the 190E 2.3-16V, with a highly tuned engine built by the British firm Cosworth. The 2.3-16V began setting records even before its official debut and in 1984, it went on to a strong showing in the new Deutsche Tourenwagen Meisterschaft (DTM, German Touring Car Championship) racing series. It was not a challenge BMW was prepared to ignore and BMW chairman Eberhard von Kuenheim and Motorsport director Wolfgang-Peter Flohr set out to develop a high-performance 3-Series that could challenge Mercedes both on the track and on the street. It would be called, naturally enough, the M3.


The DTM and other touring-car racing series followed Federation Internationale de l’Automobile (FIA) Group A rules, which required at least 5,000 cars a year, using the same suspension geometry, fender width, aerodynamic aids, engine blocks, and cylinder heads as the racer. To compete against the Mercedes, the M3 needed an engine displacing between 1,600 and 2500 cc (98 and 153 cu. in.).

Paul Rosche, now technical director of Motorsport, developed the E30 M3’s engine in only two weeks. Although BMW had both four- and six-cylinder engines in the necessary displacement range, Rosche opted for the four, because its shorter, stiffer crankshaft would allow higher engine speeds in racing tune. The E30 M3’s engine, dubbed S14, used the cylinder block of the 318i’s normal M10 engine, bored and stroked to 2,302 cc (141 cu. in.), but the cylinder head was essentially that of the M88 six, shorn of two cylinders. With its mix of familiar parts, the S14 was a known quantity. Other than some early problems with high exhaust temperatures, it proved to be very reliable for both street and racing use.

1989 BMW E30 M3 front headon
The S14B23 engine in the BMW E30 M3 is rated at 195 PS DIN at 6,750 rpm (192 hp SAE, 143 kW) in street form with a catalytic converter. Non-catalyzed engines made 5 hp (3.7 kW) more while the initial racing version made 300 hp (221 kW) at 8,200 rpm. BMW claimed the street version could run 0-62 mph (0-100 km/h) in 6.7 seconds, but few independent testers matched that claim; Car and Driver‘s U.S. spec version, tested in November 1987, ran 0-60 mph in just under seven seconds. Top speed was officially quoted at 143 mph (229 km/h) in catalyzed form, about 10 mph (16 km/h) higher than the less-powerful six-cylinder 325i.

To complement the hotter engine, Motorsport also made extensive modifications to the E30 3-Series’ body, suspension, brakes, steering, and driveline: stiffer springs and shocks, bigger anti-roll bars, and faster steering ratio; bigger disc brakes and wheel bearings, borrowed from the 5-Series; lower-profile tires on 15-inch (381 mm) wheels. Anti-lock brakes and a limited-slip differential were standard, as was a close-ratio, five-speed Getrag gearbox.

1989 BMW E30 M3 fender flare
Although the street version of the BMW E30 M3 used relatively modest 15×7-inch (381 x 178 mm) wheels, the racers were allowed wheels up to 10 inches (254 mm) wide (nine inches/229 mm from 1988) on, so the fenders were widened and flared for adequate clearance. Unlike many other homologation models, which used plastic fender flares for this purpose, the M3’s fenders are steel.

Although the E30 M3 looked like a 318i with a body kit, the only exterior panels it shared with the standard 3-Series were the hood and sunroof. The front and rear fenders were boxed and flared to allow the wider wheels needed by the race versions, while the C-pillars, backlight, and decklid were reshaped to reduce drag. The windshield and backlight were rigidly bonded to the roof pillars, making the upper body noticeably stiffer. The doors got plastic sill extensions, and large spoilers were added front and rear. The aero kit was arguably in dubious taste, but it worked: the 3-Series’ drag coefficient (Cd) dropped from 0.39 to 0.33, while high-speed lift was reduced substantially.


A prototype of the E30 M3 was first shown to the public at the Frankfurt Motor Show in September 1985, but series production did not commence until 12 months later. Customer deliveries didn’t actually begin until 1987, after the first 5,000 cars had been built. U.S. versions began to appear later that year.

The standard E30 3-Series was far from cheap to begin with and the price tag of the M3 was eye-watering. In Germany, it started at 58,300 DM (around $27,000) while the better-equipped U.S. version started at $34,000. That was nearly double the price of a 318i and some $5,600 more than the already-dear six-cylinder 325i.

An E30 M3 wasn’t a great deal quicker than the 325i in a straight line and was far less pleasant to live with. The ride was actually quite civilized, but the S14 engine was neither smooth nor quiet and many testers agreed that it was wearisome on long drives. Despite the luxury-car price, refinement was not one of the E30 M3’s virtues.

Where it acquitted itself was on the track or on a winding B road. The standard E30 3-Series was already fairly nimble and the M3’s stiffer body and retuned suspension sharpened its reflexes significantly. It had crisp turn-in, precise steering response, and fine balance, and it was commendably free of handling vices. Some critics felt it had a little too much initial understeer, but progressive, controllable drifts were readily obtainable, giving skilled drivers an immediate sense of confidence.

1989 BMW E30 M3 rear 3q
Like almost all BMWs until the 1990s, the E30 M3 has a semi-trailing arm rear suspension. Although compact and inexpensive, semi-trailing arms allow both camber and toe changes as the body rolls, which makes the car prone to oversteer if the throttle is lifted abruptly in turns. Skilled drivers appreciated that tendency, using controlled drifts to tighten the car’s line, but it could be a handful for the unwary or the unskilled, especially in the wet. The M3’s suspension is tuned for strong initial understeer, which meant that it takes a fairly determined effort to bring the tail out.

Many drivers (including your author) would probably have been better served by a combination of the M3’s fine suspension and the more pleasant 2,495 cc (152 cu. in.) six of the 325i, but for the M3’s target audience, the rawness was part of the appeal. The E30 M3 was not so much a hotted-up luxury sedan as a toned-down race car.


BMW wasted no time getting the true racing versions of the M3 on the track. As usual, Motorsport did not field a true factory team, instead offering pre-packaged kits to private entrants with everything needed to go racing.

The E30 M3’s first race was at Monza in March 1987. Although it made a strong showing, all but one of the BMWs were disqualified on obscure technical grounds, drawing howls of protest from Motorsport. Once those issues had been addressed, the M3 overcame its early setback and became the dominant force in touring-car racing.

In 1987, M3s took first and third in the German DTM series and won the Italia Superturismo Championship, the Australian Touring Car Championship, the European Touring Car Championship (ETCC), and the World Touring Car Championship. In 1988, an M3 driven by Roberto Ravaglia took the ETCC again, while Frank Sytner won the British Touring Car Championship.

Starting in 1989, the M3 also racked up a series of victories in the grueling 24 Hours Nürburgring. As late as 1991, it was formidable enough to earn a final victory at the Nürburgring and in the Belgian 24 Hours of Spa. (Even today, M3s of this vintage continue to be popular for autocrossing and other forms of amateur and semi-professional competition.)

1989 BMW E30 M3 spoiler
The BMW E30 M3’s tail spoiler is a little tacky, but it helped to reduce rear lift by more than 60% at racing speeds. The decklid of the M3 is plastic, and the rear edge has been raised by 1.6 inches (41 mm) to improve drag. Evo versions had additional aerodynamic changes, often accompanied by elaborate — and aesthetically dubious — graphics.


Although Group A homologation required the sale of at least 5,000 cars a year, the rules allowed “evolutions” of existing designs to be homologated with only 500 units. BMW fielded a series of limited-production E30 M3 “Evo” models, featuring more powerful engines, aerodynamic improvements, and other minor changes. The most formidable of these was the 1989-90 Sport Evo, or Evolution III, which had a stroked 2,467 cc (151 cu. in.) engine with 238 hp (175 kW), 340 hp (250 kW) in race trim. Starting in 1988, there was also a limited run of M3 convertibles, using the 220 PS (162 kW) engine of the original M3 Evolution. Most of these limited editions did not have catalytic converters and were never imported to the U.S.

1989 BMW E30 M3 roof
The ridge at the trailing edge of the E30 M3’s roof is a cap, concealing the discontinuity created by the reshaping of the backlight, which reduced drag.

Because of its relatively high volume, the E30 M3 was the first M edition to be built on the regular BMW assembly lines in Munich. The earliest M3s were built by Motorsport, but Motorsport simply didn’t have the capacity to build cars in the numbers required. Total production was 17,184 coupes, including about 3,800 Evos and special editions, plus 786 convertibles. Just under 5,000 were sold in the U.S.


Although the E30 M3 accounted for only a small percentage of E30 3-Series sales, it was a highly profitable exercise and it did wonders for BMW’s reputation. While the actual touring-car racers were certainly not the same as the standard 3-Series or even the standard M3, the differences were not vast, and the M3’s racing success helped to validate the company’s “Ultimate Driving Machine” slogan.

The original E30 M3 has been widely acclaimed as one of the finest driver’s cars of its era. It was by no means the only homologation special of that period — aside from the Mercedes 190E 2.3-16V, another key rival was the turbocharged Ford Sierra Cosworth — but it was arguably the best. Like the Shelby GT-350 of two decades earlier, it remains among the raciest cars ever offered to the public.

The success of the E30 M3 ensured that BMW would follow up with M versions of the subsequent E36 (1991-2000), E46 (2001-2006), and E90 (2008-on) 3-Series. Although these later M3s were faster than the original, they were also heavier and a good deal more genteel, lacking the race-ready character of their predecessor. Since M3 sales grew to account for as much as 15% of 3-Series sales, it’s hard to argue that change from a business perspective. Still, many BMW fans feel the original M3 best embodies the values that the brand purports to represent.

2008 BMW M3 (E92) coupe © 2007 Journalcar / Hatsukari715 PD
The current E92 M3 will be offered in coupe, convertible hardtop, sedan, and eventually wagon form. Unlike its four- and six-cylinder predecessors, it uses a 3,999 cc (244 cu. in.) V8 based on the 4,999 cc (305 cu. in.) V10 in the M5 and M6, rated at 414 hp DIN (304.5 kW). Despite its greater displacement, the V8 is actually about 30 pounds (13.6 kg) lighter than the iron-block six used in the previous E46 M3. The car itself is a not-so-svelte 3,700 pounds (1,680 kg) — more than 800 pounds (363 kg) heavier than the E30. (Photo: “BMW E92 M3 Coupé 1” © 2007 Journalcar/Hatsukari715; released into the public domain by the photographer, resized by Aaron Severson)

As BMW’s market share grows — in Europe, low-line versions of the 3-Series (and its Audi A4 and Mercedes C-class rivals) have decimated sales of non-premium D-segment sedans like the Honda Accord and Ford Mondeo — the M cars become increasingly important in maintaining the brand’s image. Snob value is hard to maintain when everybody and her brother drives the same kind of car as you do, and it’s difficult to claim superiority in luxury and performance when buyers can have a better-equipped, six-cylinder Mondeo for the price of a four-cylinder 318i. In the face of such ubiquity, it falls to halo cars like the M3 and M5 to uphold BMW’s prestige — and justify its premium prices.

(In the interests of full disclosure, your author must admit to being very fond of the M3, although the greater refinement of the E36 and E46 version is more to our taste than the E30 M3’s raucous engine and tacky, boy-racer spoilers. We have never been particularly enamored of most exotic sports cars, however fast or pretty, but the M3 strikes a balance between practicality and desirability that we find difficult to resist. It is one of the few high-performance cars that we would seriously consider owning.)



Our sources included Mike Covello, Standard Catalog of Imported Cars 1946-2002, Second Edition (Iola, WI: Krause Publications, 2001); Jan P. Norbye and the Auto Editors of Consumer Guide, BMW: Bavaria’s Driving Machines (Skokie, IL: Publications International, Ltd., 1984); “E26 M1 FAQ,” BMW M Registry, m.d., www.bmwmregistry. com, accessed 27 February 2009; Frank de Jong’s history page, History of the European Touring Car Championship website (n.d., originally homepage.mac. com/frank_de_jong/Race/ and now, accessed 27 February 2009; Jim Donnelly, “Edged Weapon: BMW’s M1, a hard-case Teutonic exotic,” Hemmings Sports & Exotic Car #22 (June 2007), pp. 18-23; L’Editrice Dell’Automobile LEA, World Cars 1985 (Pelham, NY: Herald Books, 1985); Paul Tan, “The History of the BMW M3,”, 16 July 2007, paultan. org/ 2007/07/16/ the-history-of-the-bmw-m3-e30-m3/, accessed 27 February 2009; the BMW M Registry’s E30 M3 FAQ, BMW M Registry, n.d., www.bmwmregistry. com, accessed 27 February 2009; Mark Wan, “BMW 3-Series,”, n.d., www.autozine. org/ Archive/BMW/classic/M3.html, accessed 27 February 2009; and the Wikipedia® page for the E30 3-Series (, accessed 26 February 2009).

We also consulted a variety of road tests, including Rich Ceppos, “BMW 318i: Truth in advertising,” Car and Driver July 1983; “No Hold Ups in the Fast Lane,” Car and Car Conversions September 1986; Jeremy Walton, “Locking Horns: RS M3: Sierra RS Cosworth BMW M3,” Performance Car September 1986; Georg Kacher, “BMW M3: From Munich with Brio,” Automobile February 1987; “Winning Combination,” Autocar 15 April 1987; “Three Scores,” Car May 1987; Csaba Csere, “BMW 325is: The spiritual return of the 2002tii,” Car and Driver August 1987; “BMW M3: Don’t ever think ‘yuppie’ again,” Car and Driver November 1987; “BMW M3 and 325is: Breeding improves the racing,” Road & Track February 1988; Bob Murray, “The Pacesetters,” Autocar 17 February 1988; “Test Extra: BMW M3 Evolution,” Autocar & Motor 28 September 1988; and “Clash of the Teutons: Three cracks of rolling thunder from German,” Road & Track January 1991. Many of these articles are reprinted in BMW M3 Ultimate Portfolio 1986-2006, ed. R.M. Clarke (Cobham, England: Brookland Books Ltd., 2007). Some details on the then current E92 M3 came mostly from Mark Wan, “BMW M3,”, 16 July 2007, www.autozine. org/ Archive/BMW/new/M3_E92.html, accessed 27 February 2009.

Historical exchange rate data for the dollar and the mark came from Harold Marcuse, “Historical Dollar-to-Marks Currency Conversion Page,” UC Santa Barbara, 19 August 2005 www.history.ucsb. edu /faculty/marcuse/projects/currency.htm, accessed 25 February 2009. All equivalencies cited in the text are approximate and are provided for illustration and informational purposes only — this is an automotive history, not a treatise on currency trading or the value of money, and nothing in this article should be taken as financial advice of any kind!


Add a Comment
  1. This car… And other 1980s-1990s BMWs, have beautiful styling. Today’s BMWs just don’t seem to fit in with me, probably because of how they look…
    To me, the original M3 looks like a “boy racer” though, but the new one doesn’t look like a racer at all.

  2. The e30 M3 skirts the line between tacky and irreverent.

    Evaluated on its own, it’s not unlike the be-scooped and be-winged WRX STI: super tacky.

    As the member of the otherwise uber-yuppie BMW family that’s willing to trade in the country club pastel polo shirt for a leather jacket, it has a certian appeal.

    Of course, good luck finding one that isn’t showing the signs of its 20 years of hard-living today.

  3. Very good post, I couldn’t stop reading until the end. A lot of details without getting boring. I have to agree with the author that the ’80s M3 were the real cars for the enthusiasts to take to the track.
    As most of the time happens, the marketing department sees the possibilities of exploiting the success of such vehicle and a softer version follows to insure sales in larger numbers.
    Fortunately there are plenty of independent shops around which will modify the factory models to the desired specs.
    Since the current M3 is larger than an ’80s 5 series, would an M1 be a more appropriate equivalent of the original M3?

  4. Well done, Aaron. Let us not forget the E30 M3’s Portugese and Italian cousin, the 320is. Built to skirt those countries excise tax on cars with engines displacing more that 2 liters, the 320is shares the M3’s engine, transmission,and suspension, but lacks it’s boy racer exterior. BMW built 2530 coupes and 1206 sedans between 1987 and 1990. As much as I admire the original M3, the idea of a 4-door E30 M3 appeals to my Q-ship lovin’ heart.

  5. Why did BMW not continue to produce high-performance 4-cylinder engines for the E36 Compact as a more direct (albeit non-M3) replacement for the E30 M3, especially as both cars roughly weighed the same?

    Was it simply because BMW believed that a high-performance 4-cylinder would have required turbocharging which they were reluctant to do until recently or something else entirely, as it is difficult to believe that BMW during the 1990s never developed a high-performance 4-cylinder engine for the E36 offering E30 M3 levels of performance.

    1. I don’t have any special insights into that question, but my assumption has always been that it was primarily a marketing/merchandising decision. BMW pretty clearly realized the M3 could become a halo car rather than simply an homologation special; I don’t have production figures handy, but my impression was that a surprisingly high percentage of E36 sales, at least in the U.S., ended up being the M version — something on the order of 15%.

      So, if that was the motivation, the six-cylinder engine better lent itself to that aim, at least with ’90s technology and emissions rules. I assume the engine from the E30 M3 was expensive to build and some kind of turbocharged successor would likely not have been a lot cheaper. The hotter inline six was a good deal more refined and had more torque, which helped to rationalize eventually offering automatic transmission (which they did at some point on the E36).

      As for the Compact, the whole rationale, especially with the E36 version, was to keep the price down, so an expensive high-performance version would have tended to defeat the point of the exercise — and, perhaps more importantly, might well have served to divert buyers from the E36 M3. With BMW’s current determination to jump on every conceivable niche, however obscure, BMW today would probably just do it anyway, but in the E36 era I think they were a little more wary (in particular with the Compact, whose price they were clearly taking pains to minimize).

      1. Can understand the rationale of BMW wanting to keep the cost down on the Compact, yet with the benefit of hindsight that attitude held the BMW Compact back against its rivals despite featuring RWD and being related to the E36/E46 3-Series.

        Whether it was canning the 5-door hatchback prototype that would have significantly increased sales, not receiving the same rear suspension as the E36/E46 3-Series, producing limited-run versions of the M3 Compact prototype to act as a halo model or even giving the E46 Compact a normal front-end as on the regular 3-Series.

        The BMW Compact’s lack of Hot Hatch credentials, could have easily be remedied with a 190-240 hp 2-litre NA 4-cylinder version of the BMW S50/S54 engines to be an indirect successor of sorts to the S14 engine used in the E30.

        1. Well, I think with the E36 Compact, in particular, BMW boxed itself in a bit with the fact that the Compact was so clearly derived from the contemporary 3-Series. It was a matter of taking the E36 and seeing what could be cut out or substituted to trim the price. Consequently, most of the things that could have been done to make the Compact a stronger or more compelling product became problematic because they would have (a) narrowed the price gap between the Compact and the regular 3-Series sedan and coupe, or (b) risked making the Compact seem like a better choice than the 3-Series and thus cannibalizing sales of the sedan and coupe, which I believe were BMW’s most important products sales-wise, or (c) both of the above. The dilemma that represented is obvious and I suspect illuminating as regards BMW’s purchase of Rover — I’m sure the idea there was use Rover Group products to bolster the lower end of the market so as to spare the BMW brand these sorts of dilemmas.

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