build to enjoy

The E46 M3 is no stranger to the enthusiast world, and for good reason. It is an epic car. In fact it might be my favorite M3 ever made, but also so might be the generation that followed, the E92. The E46 M3 was in production from 2000 through 2006, an absolutely brilliant time to be alive if you like driver focused cars. For the general public, you got your choice between a coupe or a convertible. They all came with the same iconic S54 Inline 6-cylinder engine and you could choose between a 6-speed manual transmission or what they called the SMG transmission. The SMG was a love/hate, and most hated it, myself included. It was actually also a manual transmission, just one that was electronically shifted automatically or via paddle shifters on the steering wheel. Commonplace today, but they’ve come a long way in refinement and performance. The SMG transmission available in the E46 M3 was archaic in comparison.

Nevertheless, the E46 M3 has cemented its way into so many enthusiasts’ hearts. They’ve already hit the bottom of their depreciation curve and are going back up in price, somewhat dramatically, since COVID. So what makes the E46 M3 so special?

Why The E46 M3 Matters

The E46 M3 arrived when BMW truly was focused on building the ultimate driving machine, a phrase that was at the center of their marketing campaigns back in those days, and they delivered on it. The E46 is the third generation of M3 and it was still following the traditional ethos and soul that created the M3 identity with the E30 and E36 models. It had a high-revving naturally aspirated engine that cleared the 100 horsepower per liter bar, making 333 horsepower from 3.2 liters of displacement. And it had updated, yet traditional styling. Still boxy with the iconic front kidney grilles. Flared fenders and subtle styling cues separated it from the base model 3-series., and the rest of the differences were largely in the chassis and suspension components. The driving experience was very connected and had an analog feel to it. The car was nimble, responsive, and it made epic induction noises.

The engine itself is known as the S54, a 3.2L inline 6-cylinder engine with individual throttle bodies that gave the engine it’s signature snappy response and crisp “bark” on a good rev-matched downshift. It made 333 horsepower and 262 lb. ft. of torque, which wasn’t exactly earth-shattering at the time, but it did rev to 8,000 rpm.

In it’s day it was compared to cars like the Audi B6 S4, the Porsche 996 generation 911 Carrera, and the Mercedes C32 AMG. In performance tests compared to those vehicles the E46 M3 won, nothing, but it was never last either. So while it didn’t blow the socks off any of it’s competition at the time, it was always regarded as the most balanced of the bunch, and that’s precisely why it resonated better than it’s competition with the driving enthusiasts…exactly who they built it for.

There were one special edition E46 M3 during it’s six-year run and boy was it special. The BMW M3 CSL (E46) was introduced in 2003 and ran for two production years at a very low volume. In 2003/2004 BMW only made 1,383 M3 CSLs which was basically a factory works track focus car, much like the infamous Porsche GT3-RS. It featured a different airbox, a different tune, a carbon fiber roof, thinner glass, and a host of other small improvements that are peak nerd level upgrades. The BMW M3 CSL famously ran a 7:50 lap time around the Nurburgring Nordschleife circuit which put it in supercar territory at the time. The CSLs were never offered in the US, but the closest we got to it was a performance oriented options package you could choose for your new E46 M3.

The competition package is still a highly sought after spec in the E46 world and those who equipped their new build M3s with it received different wheels, quicker steering, bigger brakes, and an “M Track Mode” driving dynamics setting.

BMW also created the E46 M3 GTR race car to race in the American LeMans Series (ALMS) and alongside that, one of the rarest unicorns of all time, the M3 GTR Strassenversion, which was a road going homologation special. At the time, the 3.2L I-6 engine we got in the production M3 wasn’t powerful enough platform to be competitive in the ALMS series, so BMW created a 4.0L V8 engine to stuff into the M3 GTR race cars. The problem was, in order to satisfy the rules requirements in ALMS, the race car had to be based off of a production vehicle and since the production vehicle didn’t offer a V8 option, they had to make a minimum of 10 production vehicles that featured a street version of the 4.0L V8. It is rumored that BMW actually only completed 3-6 of these BMW M3 GTR Strassenversion, or “Street Version” cars in reality making them one of the most rare unicorns in BMW history.

The M3 GTR race cars saw immediate success in the ALMS series sweeping the drivers, team, and constructors titles in 2001. And in 2004 and 2005 a BMW M3 GTR won back to back years of the 24 Hours of Nurburgring endurance race.

My View

To me, the E46 M3 at the time, wasn’t the fastest in it’s field, and it wasn’t quite as big a deal to the enthusiast community when it was new as it is today. Regardless of the mid-pack performance, it always seemed to be the car people wanted to drive again. I was fortunate enough to spend some time behind the wheel of an E46 M3 at the tail end of when they were new. My dad purchased an E46 M3 Convertible brand new in 2006 and I found myself borrowing it frequently. We put a titanium axle-back exhaust on it and it completely changed the driving experience for the better, especially with the top down. I took that car on our honeymoon in 2009 where my wife and I road tripped it from where we got married in Laguna Beach, California, all the way up to Napa Valley wine country and eventually over into San Francisco before driving it home to Las Vegas. Driving that M3 through California wine country was an experience I will never forget, and it’s purely because the car was just so damn good all around.

I have been fortunate enough to get some track time in an E36 M3 that preceded the E46 as well as the E92 M3 and F80 M3s that followed it and I will say this. The E36, E46, and E92 were all exceptionally brilliant and balanced driving experiences, but BMW M cars lost their soul a bit with the F80 and current G80. The E46 is a premium driving experience, right up there with the Porsche 991 GT3 in my opinion. And it’s the reason it’s legend continues to grow today.

Unfortunately for all of us who don’t currently own one, we missed the boat on catching them at their cheapest. Post-COVID, prices on the E46 M3s have gone up considerably and don’t seem to be slowing down, particularly for nice examples. M3s with the not-so-good SMG-II paddle shifted transmission will net you around a 25% discount if you’re willing to put up with it…or swap it. And the convertibles are a good bit cheaper than the coupes as well. Any of them are worth the price of admission in my opinion.

My Dream E46 M3 Build?

So what is my dream E46 M3 build? Quite honestly, it wouldn’t be much of a build as it is hard to improve upon near perfection. It would definitely be an OEM+ build and it would have to start with the right spec. For me, it would have to be a coupe, not a convertible. It would have the traditional 6-speed manual transmission, the competition package, and quite frankly, most any color it was offered in looks good on it. My ideal color though would be either the Laguna Seca Blue with a black interior, or Silver Grey Metallic with the Imola Red interior. Either one would find me sleeping in the garage the first week of ownership.

I would put some coilovers on it, some wheel spacers because the OEM competition package wheels are already perfect, that same titanium axle-back exhaust I fell in love with on my Dad’s E46 M3, and a CSL style air box for peak induction noises. That’s it, that’s all it needs in my opinion.