Why the BMW E36/8 Z3 M Coupe is the Best M Car Ever Made

When most people talk about BMW’s line of M-Cars, they instinctively begin with the introduction of the E30 M3 as the little pet-project that could. They will explain how it was hastily thrown together from a then tiny M-Division in response to the overwhelming success AMG experienced with their dominance in the German Touring Car series. They will then bring up the lineage it grandfathered and how the M3 is almost universally considered the benchmark for performance commuter cars. One car they will almost certainly breeze past, however, is the one we think that best demonstrates the idea of sheer driving exhilaration ever cooked up by the boys behind the M-Division. The E36/8 Z3 M Coupé is the greatest M-Car ever developed for its handling characteristics, small package, unique appearance, and astounding performance.

Before the die-hard E30 M3 fans start beating down our doors spouting gibberish about their extra 2,000 RPM per gear or the chassis rigidity and weight balance, we should look at what brought the E36/8 into the hearts and minds of the most dedicated performance enthusiasts. In the middle of the 1990’s, BMW began moving away from their boxy style vehicle design and adopted a more sculpted look around the corners of their cars. The results were the introduction of the E36/7 Z3 Roadster and the E39 5-series.

The Z3 and the 5-Series sat on either side of the E36 3-series. They shared several components and fit neatly into their market segments. A roadster for the balding middle-management types, a sports coupé with convertible and sedan options for the widest range of consumers, and the big E39 for business executives who insisted on maintaining a modicum of performance capability. All cars shared a number of similarities like engines and design elements. The parts crossover isn’t a new idea for BMW; they had previously used variations of the same engine in almost every one of their road cars for far longer than a decade. With that same scavenger mentality, a lead engineer and his team pitched a wild idea: to actually produce something that is usually an automotive pipe dream.

The unique design of the M Coupé was the result of Burkhard Goeschel, a transfer from Daimler-Benz back in 1978, and his team of engineers. Goeschel brought us cars like the M3 CSL, the Z8, and of course, the Z3 Coupé. He wanted to create a pure driver’s car and thought the Z3 chassis was the best way to achieve that goal. Unfortunately, due to the roadster’s lack of a traditional roof, chassis rigidity was an issue. His solution was to give the car a roof, hatchback, and a big engine. The newly designed M-Coupé offered a torsional rigidity nearly 2.7 times greater than that of the roadster, which made the chassis a perfect platform for a stable, short wheelbase, performance Coupé compact that Goeschel was able to eventually coax the BMW executives to green-light for production.

The team took a recipe for success developed by hot-rodders the world over: use what you have on-hand and assemble the best combination of parts to create the most engaging car possible. BMW took their smallest current production chassis, highest output engine that would fit, gave it a roof, and the results were the best driving experience possible without producing hardly anything new at all. In fact, from the A-pillar to the nose, the E36/8 M-Coupé is identical to its non-M roadster counterpart. For the engine, either a European S50 or American S52 were equipped from 1998 to 2000. These engines, produced for their respective markets, could also be found in the E36 M3 and produced a considerable amount of power for their size while they also allowed the driver to enjoy a rev range that topped at 7,500 RPM. The only part of the car not found anywhere before the production of the M-Coupé is the distinctive ‘breadvan’ rear hatch for which the coupé receives its affectionate nickname, ‘the clown shoe’.

Driving the car is an incredible experience. Shifting through the gears in a straight line with your eyes closed (if you would ever dare) is an almost indistinguishable experience to that of the M3 in the S52-equipped generations. Almost, that is, except for the suffocatingly tight cabin space available for a driver my size. At nearly six-and-a-half feet tall, the M-Coupé does little to forgive my lankiness and punishes me by forcing an origami-like folding procedure in order to situate myself behind the wheel. The reward of squeezing in, however, is what makes the M-Coupé the absolute heartthrob of the M-line of cars. The chassis rigidity makes the car incredibly stable and predictable, even with the driving position almost on the rear differential and the front of the car nosing out well in front of the steering wheel. The low-slung driving position allows the driver to feel a closeness with the pavement while the power output gives a sense of giddiness with every throttle depression.

Under the hood is where the biggest difference between the M and non-M Coupé becomes immediately apparent. The S52 provides a thrilling power plant to the little Coupé that, paired with the light weight of the vehicle, makes it all around faster than the same engine in the E36 chassis. The snappy responsiveness of the tight, quick-ratio, steering rack and handling characteristics of the compact gives the driver an almost telepathic connection to the four wheels and provide an intimate sense of connection with the road.The overall tiny package of the E36/8 makes it feel almost identical to an S5x swapped E30, but the additional rigidity and updated construction give a more complete and intentional experience rather than the afterthought of a swapped engine. The E36/8 was meant to have this engine.

The small size of the Coupé makes the car easy to think of as an extension of the driver, which further adds to the feeling of direct communication with the vehicle at all times. Improving on that feeling is tough, but H&R provides an excellent upgrade in their suspension options for the little hatchback. Driving an M-Coupé is like putting on a wet-suit that responds to your movements but somehow improves your abilities. You find a sensation of greatness in yourself as your confidence is almost immediately fluffed by the car’s predictability. High-speed corner entries, sideways exits, and blisteringly fast entrance ramp acceleration become almost involuntary reactions to anyone who finds themselves in the cockpit of an M-Coupé.

Due to its size, power, handling characteristics, snappy responsiveness, and puzzling appearance, the rare and rather quixotic E36/8 is arguably the most enjoyable M-car ever produced. How could it be any better without aftermarket modification? In 2001, BMW gave the car world possibly the best all-around package ever offered before or since: the S54-powered E36/8. This car boasted the impressive 325-horsepower, 6,800 RPM redline engine found in the E46 M3 and gave the M-Coupé an additional 80 horsepower for even more ridiculousness in the ugly little car. That package, while exceptionally hard to find and knuckle-bitingly expensive, makes for the pinnacle of a connected driving experience to be found in any car.

Unfortunately, after just a three-year production range, the S54-powered E36/8 Coupé marked the end of the line for the interesting little BMW. Lack of immediate demand for a car intended for nothing more than driving that also set a customer back nearly $50,000 didn’t sit well. Additionally, the risky looks sealed the fate of the M-Coupé and it was not offered again after the 2001 model year for the remainder of Z3 production. It would later be cemented as one of the most coveted collector vehicles, though, as a result of its rewarding and engaging driving experience as well as the low number of vehicles produced. Finding one now, for this reason, is tough. While they may be few and far between, drivers of the M-Coupé find themselves as part of an elite club. They are owners of what is Goeschel’s favorite car for the very reasons outlined in this article. The M-Coupé offers something pure and tantalizing in its compact package. The car gives drivers the best possible combination of BMW’s most hard-edged performance components packed into a dedicated sport-roadster.

The incredible handling, aggressively styled exterior, in-your-face interior, overpowered engine, and stiff chassis make the M-Coupé a collection of BMW’s greatest hits. This amalgamation of parts gave the world the purest driving experience without reinventing the wheel and put it in one of the most iconic body designs ever put into actual production. We believe the E36/8 M-Coupé is the best M-Car ever produced and the one which exemplifies those qualities that make up an M-Car more effectively than any of its high-performance BMW brothers.