Let BMW Show You Around The Coolest Version Of The Coolest E36 3 Series

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Screenshot: BMW

The E36 3 Series Compact is the best kind of E36. And I promise I’m not saying that because 318ti owner José Rodríguez Jr. forced me. It’s the smallest and lightest E36, the funkiest looking and the most under appreciated, and that combination of qualities would make any car the best version of its range.

But there was a better version of the best E36, one BMW built precisely a single example of: the M3 Compact. Now, an M3 of this body style was never sold, but the automaker created one supposedly to commemorate the 50th anniversary of German enthusiast publication Auto Motor und Sport in 1996. Personally I couldn’t imagine a better birthday gift if I tried, and a video BMW Group Classic uploaded to YouTube on Thursday explains why.

The five-minute video begins by taking us through two editions of the E36 Compact — a 318ti with the 1.9-liter four-cylinder and a 323ti with the 2.5-liter inline-six. These engines developed about 140 and 170 horsepower respectively, and seeing a whole-ass inline-six stuffed under the hood of an E36 Compact is quite a surprise if you haven’t laid eyes on one in a while.


But then there’s the unicorn, the one BMW never produced. Interestingly as our host Benny points out, the one-off M3 Compact looks “serial production standard” — excusing the race-ready Recaro seats, of course. “Everything is meant to be in here, so they could have built it right away.” And yet they didn’t! What a tease.

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Photo: BMW

Unlike José, I did not know the E36 Compact utilized so many parts from the E30-generation cars — something particularly evident in the dashboard design. It was a strategy to keep costs down, which seems like a clever move on BMW’s part. And had the company produced the M3 Compact in numbers, it would’ve made for an equally clever and comparatively inexpensive way to get the engine everyone wanted — the M3's 321 HP, 3.2-liter S50 inline-six.

As you’d suspect though, all that grunt in a car 330 pounds lighter and nine inches shorter than the E36 M3 happened to make this one-off a bit of a handful, as BMW’s own retrospective explains:

If the car had ever gone into series production, however, engineers would probably have had to dial down its power in order to improve drivability. Due to the compact dimensions and low weight, it quickly became clear during test drives that the M3 Compact was an innovation best left in the hands of experienced drivers only.


Of course, some E36 Compact owners have since done what BMW didn’t, and shoehorned S50 motors into their cars. Those lucky devils. For the rest of us, this video will have to do.