The BMW E46 325i was one of the more popular options when it was new, but as the chassis is now twenty years old at its oldest, these lower-trim 3-series examples have fallen from favor. The 330i and M3 tend to attract more attention, but that means these less-desirable versions are more affordable than ever. Unfortunately, there isn’t much you can do in terms of easy bolt-on performance, but there is still tons of fun to be had with a 325i. These are some of the best upgrades you can make to your E46 325i to improve your driving experience and add some excitement.

Shark Injector

The first improvement you should make to your E46 325i is a Shark Injector unit. It is likely the easiest upgrade you can perform and instantly offers a better driving experience. It’s just a plug-and-play software upgrade that unlocks a higher rev limit, removes the top speed limiter, and gives you an additional 7HP from a simple plug-in software unit. You’ll notice better throttle response and snappier performance from something that takes less than a minute to install.

Short Shift Kit

There are a few different options you can go for with your E46 325i when it comes to short shift kits. The feeling of snappy, engaging, and shorter shift throws will help make your driving experience more fun if you happen to have a manual transmission-equipped 325i. In terms of options, you can do something easy and basic or complex and expensive here, depending on what you want. If you just want a more fun driving experience, the Z3 or even Z4 conversion is quite popular. Using OEM BMW parts, you can simply exchange the existing shift lever in your E46 for either the Z3 or Z4 version, which have shorter throws than the factory E46 one. For the more extreme, the CAE Ultra Shifter and IRP short shifters are excellent track-performance oriented options. While much pricier, these are the most direct, quickest-shifting, and completely eliminate play in the shifter. If you plan on spending time on the track, you might want to consider these options.

BavAuto Ignition

Another easy upgrade and common sense maintenance service, BavAuto ignition coils and fresh spark plugs will do wonders for an aging M54. Over time, coil packs wear out and spark plugs will obviously need to be replaced. If you experience misfires or have a rough idle, the usual culprit will be a spark plug, coil pack, or both. When the time comes to replace them, the ideal choice is to go for the best options available. You won’t see any real performance increases from upgrading your ignition, but you will have more consistency and better durability from the BavAuto coils which makes losing power less likely. Think of it like the best preventative maintenance you can do.

Single-Mass Flywheel

It’s now that we want to remind you the point of these upgrades is to improve the driving experience to be had in your E46 325i because this modification is much more involved than the previous ones. You’re never going to get incredible horsepower from this engine without significant modifications or ditching the M54B25 all together, but you can still make it super responsive. One of the best ways to do that is with a lightweight single-mass flywheel conversion. The factory dual-mass unit is great for making driving easy for the lazy driver, but for an enthusiast, the weight of the dual flywheel can feel sluggish. A conversion like our ECS single-mass flywheel kit will offer faster revs, snappier throttle response, and won’t have that stereotypical chatter associated with other lightweight flywheels. When it’s time to replace your clutch, this should be your go-to kit.

Coilovers

Finally, something you can enjoy when driving and just looking at your E46 325i. Coilovers offer significantly improved handling as well as more attractive looks with the body lowered down to eliminate that ugly wheel gap. With the lowered center of gravity, you’ll be more confident in the corners and will find the beauty of the E46 chassis and its 50-50 weight distribution becomes even more fun to drive. There are quite a few different choices you can make here, but one of the more popular options is BC Racing. They are affordable for the capabilities they have and still offer a good ride quality even with the stiffer rates thanks to the adjustable dampers, which is why many enthusiasts on a budget pick BC BR Extreme Lows on their E46s.

Sway Bars

To further improve your handling, a set of beefier sway bars will help reduce body roll beyond what the coilovers do alone. Sway bars tie each side of your suspension together to act against the natural roll away from corners, which will keep your E46 flatter and more stable for more aggressive driving. You can also adjust your bias for front or rear grip by changing how aggressive the sway bars are with different mounting holes for the end links, which allow you to fine-tune your suspension settings to your liking. H&R is a go-to source for performance sway bars thanks to their long history of success on the street and track in all levels of motorsports.

Wheels

Similarly, adding wider, lighter, and more attractive wheels with grippy tires will also help you attack corners. Widening the track of your E46 325i will improve grip by increasing the surface area of the tire you have in contact with the pavement, reducing unsprung weight will regain some performance lost to the factory wheels, and the better look will help tie everything together, especially with a lowered ride height. Popular options are APEX ARC-8 and FL-7 since APEX Wheels offers perfect fitment specs for the E46 along with a number of other BMW chassis.

Brake Upgrades

Lastly, upgraded brakes will help round everything out in terms of providing an overall more engaging driving experience. With upgraded pads, rotors, stainless steel brake lines, and some good brake fluid, you can expect shorter stopping distances that allow you to stay on the throttle longer. With low horsepower cars, relatively speaking, maintaining momentum for as long as possible is paramount in terms of performance, which is why this list focuses so heavily on suspension tuning, wheels, and brakes. To take full advantage of all the power the 325i delivers, you need all three. Our performance brake kits have just about everything you need in one kit to replace and upgrade your stock brakes. All you’ll need is some good fluid and a set of ECS exact-fit stainless brake lines for a much more responsive brake setup.

Wrapping Up

With the E46 325i, the key to having the most fun you can with the least investment is certainly maximizing its existing potential rather than trying to stuff a bunch of power under the hood. The chassis is extremely responsive, especially with upgraded suspension, brakes, wheels, and tires. A few other choice upgrades, like the Shark Injector, lightweight flywheel, and short shift kit, will make your E46 325i one of the most engaging daily drivers or weekend track toys you’ve ever driven. Of course, you’ll need to tackle maintenance alongside these upgrades, but that’s another article for another time.