1999-2005

Following the path it set with the introduction of the E36, the E46 3 Series came to market one model at a time, starting with the 1999 323i and 328i four-door sedans. The most obvious changes to the new 3 Series came by way of its reshaped body and included a new front end, wider wheel arches and a more rounded roof line. The headlights now featured "cut outs" below the lenses, which emphasized the traditional BMW quad headlight design.

Just as the E36 had grown in size in comparison to the E30, so grew the E46. The wheelbase increased by only an inch to 107.3, while overall length was up about an inch and a half to 176 inches. The 3 Series was still comfortably compact and smaller than the contemporaneous Honda Accord.

Mechanically, changes to the E46 were initially rather subtle. Structurally, the body shell was, BMW claimed, 70 percent stiffer than the E36's, and the extended wheelbase allowed the engine to be moved further back in the chassis in order to retain the E36's 50/50 weight distribution. More extensive use of aluminum in the suspension components helped reduce unsprung weight, and the track was widened, even though the basic suspension, braking and steering system designs were almost unchanged. Rear-seat passengers found the E46 roomier than any previous 3 Series, and all the occupants were protected by new structures and a full array of airbags.

Four-cylinder models weren't part of the E46 equation in America, though they continued to be offered elsewhere. The U.S.-market inline-6 engines featured a lighter aluminum block, a more advanced Double VANOS variable valve timing system and a dual resonance intake system. The E46 328i's 2.8-liter mill made 193 hp at 5,500 rpm and 206 lb-ft of torque at just 3,500 rpm, while the 2.5-liter produced 170 hp and 181 lb-ft of torque in the still confusingly named 323i.

For 2000, the E46 line expanded with the introduction of the 323Ci and 328Ci coupe models and, later, the convertible (in 323Ci form only). For the first time, a wagon (only available in 323i trim) joined the line.

Despite still being a fresh face in the marketplace, the E46 was upgraded in both 2001 and 2002. For 2001, the 2.5-liter engine was modified to boost its output up to 184 hp, while the 2.8-liter engine was replaced by a new 3.0-liter version rated at 225 hp. Though wagons were still restricted to the smaller engine, convertibles could now get the big one. In celebration, BMW once again called the 3 Series with the 2.5-liter engines 325s, and those with the 3.0-liter engine became 330s. In addition, the company reintroduced all-wheel drive as an option on sedans and wagons to create the 325xi and 330xi. To the chagrin of hard-core BMW enthusiasts, steering effort was also lightened. For 2002, BMW updated the E46's appearance with a revised front fascia and new taillights.

To no one's surprise, the E46 continued to be just as wonderful as all its 3 Series ancestors. But the E46 M3 was something else altogether.

With flared wheel arches, side gills and four chrome exhaust tips burbling under a unique rear skirt, the M3 was muscular, refined and more than a little menacing -- a frat boy who was both the smartest kid in school and an unabashed steroid abuser.

But the best part of the E46 M3 was underneath that sensuous sheet metal. Concealed beneath the aluminum "power dome" hood were 3.2 liters of inline-6 packing every engine technology except thrust vectoring (which is still reserved for fighter aircraft). Output was a staggering 333 horses, fully 93 more than the previous M3's motor, and 262 lb-ft of torque. It was amazing what variable valve timing, individual throttle bodies for each cylinder, an 8,000-rpm redline and an exhaust system BMW calls "one of the freest-flowing ever installed in a production car" could produce. In our tests, the M3 ripped from zero to 60 in 5 seconds flat. Devouring the quarter-mile required just 13.5 seconds at 105 mph.

For 2003 the 3 Series finally received the option of a DVD-based navigation system. Other enhancements fitted as standard included a front center armrest for the 325 models, a rear center headrest for sedans and wagons and a moonroof for the wagons. A Performance package for the 330i sedan brought 10 more hp (for a total of 235), a six-speed manual and a firmer suspension (with 18-inch alloys) to this already superb sport sedan.

A slew of changes took place for 2004; those of the mechanical variety included the expansion of the six-speed SMG gearbox to models beyond the M3 and the availability of an automatic transmission with the 330i Performance package. Visual tweaks were subtle on the 330i sedan (a black grille insert replaced the previous silver unit) and more overt on the coupes and convertibles (new front fascias and light cluster designs). A few new features joined the standard equipment list for sedans and wagons, including rain-sensing wipers and automatic headlights.

2005 marked the final year of production for the E46 sedan and wagon. A power moonroof and Myrtle wood trim became standard on all models, a power top was made standard on the 325Ci convertible and SMG transmission availability was limited to 3.0-liter models equipped with the Sport package. The Performance and Premium packages could now be ordered together, and a flat tire warning and white turn indicator lights were standard across the lineup.

electronics.