FAST

FACTS

With peak power occurring @ 7900 RPM and paired with a 3.62 axle ratio, the drivetrain practically begs the driver not to shift until the 8,000 RPM redline. It was obvious how proud BMW was of the S54, as it produced the highest specific output of any naturally aspirated engine in BMW’s history (minus the limited production V12 developed for the McLaren F1)
The piece de resistance is a set of 6 motorsport-inspired DBW individual throttle bodies that provide the required airflow for an 8,000 RPM redline. During development, however, BMW had difficulty fitting this intricate intake setup underneath the hood of the standard 3 series. Their solution was to create a sporty-looking bulge in the center of the hood to accommodate the intake. This bulge is commonly referred to as the “Power Dome”
It was also realized during development that the side fender vents (which were intended to evacuate heat from the engine bay) weren’t very effective. However, the design was already approved by the management team, and since everyone liked the added design touch, BMW decided to keep them. These tiny vents stayed put as a signature design trait of all BMW M cars moving forward
In an unconventional attempt to provide increased steering feel for the driver, the M3’s rack and pinion steering employs a slower steering ratio than the base 3 series (15.4:1 on the M3 vs 13.7:1 on base cars). However, the ratio might have been too slow, as BMW found the need to upgrade to a faster ratio (14.5:1) for buyers who opted for the driver-focused Competition package (offered in ’05 and ’06)
BMW’s M division was highly against the idea of putting an automatic transmission in the E46 M3. The development team must have put up quite a fight against corporate because, in the end, they got what they wanted – no automatic transmission was to be offered in the M3, despite the push from corporate. The car was to be built exclusively with one transmission: a 6spd manual. There was one caveat: buyers could opt to have the transmission electronically controlled, without a clutch pedal. This computerized setup, referred to as SMG (Sequential Manual Gearbox), was as close as buyers could get to an automatic trans. The computer (Drive Logic) engages the clutch during gear changes, and you can control the speed (and aggressiveness) of the shift via 6 selectable settings
Using only one transmission for all cars not only saved BMW money, but it made it extremely easy to convert an SMG car to a gated 6spd
Because they are the same transmission, an SMG car will put down the same power as the manual car (no extra drivetrain loss found in traditional automatics). This makes “manual” swapping an M3 much easier than any other car, as the transmission and driveshaft are already in place. The swap mainly involves removing the SMG components (which weigh only 18lbs), adding a 3rd pedal, and re-mapping (or swapping) the ECU (and a few other things)
BMW didn’t bother bringing the infamous CSL model over to the U.S as it would be too expensive to produce (carbon-fiber roof, emissions certify the CSL engine, etc) and too expensive to sell (it would be a $22k option at the minimum, like it is in Europe). Also, the V8 M3 was just around the corner. The solution? Offer a $4000 Competition package (ZCP) that gave U.S buyers the CSL “look”, as well as the CSL brakes and steering rack
The “look” referred to the 19″ “CSL style” wheels, aluminum interior trim, alcantara hand brake, and alcantara steering wheel with M Track Mode button replacing the cruise control/audio buttons
The CSL brakes refer to the enlarged cross drilled/vented two-piece rotors that are fixed onto a “hat”. This setup (common in racing) is lighter, eliminates deformation, and prolongs the life of the wheel bearings. This marks the first time cross-drilled rotors are fitted to a production BMW in the U.S
In regards to the CSL steering, the rack features a quicker 14.5:1 ratio (only requires 2.7 turns lock-to-lock versus 3.0 on the base M3)

Key Model Year Changes:

2001
First year of the E46 M3 in the U.S The only year of the 4:3 square navigation screen (on the cars eqiupped with it)
2002
The Navigation system is now wide-screen (16:9 instead of 4:3) In cars with no Navigation system, an in-Dash CD Player replaces the tape player First year of the Bi-Xenon option (replacing the single Xenon lights) as well as the Automatic headlight option First year of Titan Shadow trim (replacing Gloss Black trim) Strut Bar is now standard equipment (occurred mid-year). 19" wheels became available for the first time as well Mid-2002 models w/out Navigation are now pre-wired for Sirius satellite radio
2003
LED tail lights were added halfway through the year First year of the aluminum trim option An in-dash CD Player is now available on cars with navigation First year of the DVD-based navigation (replacing CD-ROM navigation HVAC controls are updated Mid year: the trunk handle trim piece became wider, extending past the keyhole First year of Mystic Blue Metallic & Silver Gray Metallic
2004
First year of BMW Assist (similar to GM's Onstar), which adds a fin to the rear of the roof. This roof fin is the quick way to differentiate the later model M3's from the earlier models Revised rearview mirror (now square) Final year of Laguna Seca Blue and Oxford Green Metallic
2005
First year of the ZCP Competition package and the Style 163M wheels First year of Interlagos Blue Metallic (A30) which could only be ordered with the Competition package Front suspension is revised on coupes to reduce understeer and improve ride quality (via softer shocks. 2004 and older M3's had a slightly harsher ride) Alcantara, as well as Eucalyptus Malt Wood trim, are now available as a standard option
2006
Final year of the E46 M3 Virtually no changes between 2005 and 2006 models