More than six years ago I was fortunate enough to be one of the first journalists to drive the new generation E46 M3. The previous E36 M3 was perhaps the most balanced and inspiring car in the world; I thought BMW could never better it. I thought wrong.

Although the new E46 chassis was both bigger and heavier than its older sibling, BMW had a plan to counter its extra girth, the newly developed S54 inline six. Sporting 333 bhp and an 8000-rpm redline, I figured this version was the Europe-only model; BMW was going to do the same thing they did with the Euro-spec E36 (we got a torque-laden 240-hp engine while the rest of the world got a 321-hp screamer).Again, I thought wrong.

The S54 powerplant in the E46 M3 was technically an evolution of the iron-block S50 unit used in all European-spec M Coupes built through June of 2000. Although the peak power and torque of the S54 (333 bhp at 7400 rpm and 261 lb-ft of torque at 4900 rpm) is comparable to the S50 B32 (321 hp at 7400 rpm and 262 lb-ft of torque at 3250 rpm), they share few major components and differ in many areas, including:

-Increased cylinder bore to 87mm (from 86.1mm) for a new total displacement of 3,246cc (from 3,201cc)

*Modified camshafts

*High pressure Double VANOS continuously variable valve timing system with faster operation at high rpm

*Increased compression ratio to 11.5:1 (from 11.3:1)

*Advanced BMW/Siemens engine management control

*Finger-type rocker arms for reduced reciprocating mass and friction

*One-piece aluminum head casting for lighter weight

*Scavenging oil pump to maintain pressure during heavy cornering

Basically, the S54 is a German-built hot rod mill, an engine optimized for maximum performance. Domestic engine builders have been doing the same stuff for years (except for the double VANOS part).

Weighing in at 3,415 pounds, the E46 M3 is significantly heavier than the E36. It's also got a longer wheelbase and significantly wider front and rear track. Whereas no one considered the E36 M3 a spartan vehicle, it does look fairly simple compared to its younger brother. The E46 comes off as a much more luxurious car, and for this owner that set off warning bells.

My first thought was the M3 was being bastardized with comfort items like rain-sensing wipers, enhanced audio system and heated seats. The leather is ultra-luxurious, featuring M logos embossed in the headrests, and the three-spoke steering wheel features controls for both the stereo and cruise control. And surprisingly, the rear seats are properly bolstered for real live human adults. You can actually sit back there without spine-snapping contortions.

So yeah, the M3 is luxurious. You got a problem with that? I sure don't. In fact, I can't conceive driving without these features.

I'd been looking for an E46 M3 for nearly two years. Every time we featured a massaged M3 it just hurt all the worse knowing that was one less car for me. This 2001 Laguna Seca Blue job literally fell into my lap. The previous owner didn't like the manual gearbox and wanted something bigger to ferry clients about. The guy is a big fan of European cars but not a snob. It was important the car go to someone who'd appreciate it. Apparently, I won the "why I should own this M3" essay contest. Within 24 hours his secretary had drawn up a sales contract and title transfer.

It was all mine.

That was nearly seven months and 4,200 miles ago. Although I was pressured by ad wanks to modify the car with aftermarket bits, I wanted to understand the car in its pure, unmolested form. Obviously, I've been in no great hurry to change things. For this driver, the E46 M3 is as close to the perfect car as it gets. How the hell do you make it better? Is it possible to make something "more perfect" or "the ultimate ultimate"? We'll see.

Because the E46 is so new, things like bushings, seals and motor mounts are in great shape. Unlike my previous Project Corrado VR6, I don't have to rebuild the chassis from the ground up. I'm actually kinda sad... no I'm not. The only advice I got from our resident BMW expert, Mike Miller, was to change the gearbox oil to a high-quality synthetic.

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