The next M3 based on the E46 body will very likely be introduced in late spring 1999, serial production and sales will start in the year 2000. Rumors stating that the E46 M3 will use a detuned version of the new M division V8 of the M5 and not a 6-cylinder were not confirmed. Instead the BMW M GmbH already confirmed that the next M3 will have an inline-6 as well.
The following are spy photos of the E46 coupe, which can be found on the Internet presented as spy photos of the M3. However, I am not sure if all pictures really feature M division test cars carrying M engines and technology. I think most of them simply show prototypes, i.e. pre-production or test models of the upcoming standard E46 coupe.
Press Quotes
The following are quotes taken from an article about future BMW 3-series models in the 13/98 (June 13th) issue of German magazine "Auto Zeitung":
"The look of the 3rd generation M3 will be mainly similar to the elements of the new M5... [...] ...The new M3 will stick with the Inline-6-Cylinder. The displacement ... grows to 3.4 liters. [...] ...improved max. power output (about 350 hp) and torque (370 Nm). [...] The second generation of the sequential M gearbox (SMG) will be very different to the current model. It will no longer be controlled by a conventional stick, but by buttons at the steering wheel. [...] The M3 starts as a coupe. A 4-door sedan - according to the current information - will not be available anymore, since it's part in the total sales was under 10 percent. Instead BMW is thinking about an M3 Touring. Definitely built will be the M3 convertible, expected for spring 2001."
Auto Bild" Article about the next M3
The Car Magazine "Auto Bild" is one of the first German magazines to show semi-official pictures and info of the new M3.
Quotes from the Article
The following quotes are taken from an article about the upcoming 2001 BMW M3 in the 21/1999 issue of German magazine "Auto Bild" from May 28th 1999:
"Successors have to offer more - more of everything. They have to be bigger, more powerful, better. How else should the customers be convinced to buy a new car? While these tasks are quite easy to solve with bread-and-butter cars, the developers face tremendous difficulties if they have to deal with a thouroughbred like the BMW M3. When in later summer 2000 the new M3 arrives, a hard piece of work lays behind the M-Team around development supervisor Gerd Richter. [...] A front spoiler with mighty intakes, a rear bumper in M5-style with four exhaust pipes, as well as 3 centimeter widened fenders to fit the 18-inch wheels (front 8J with 235/40-tires, rear 9J with 275/35 tires) are the visible differences to the standard Coupe. [...] The most significant problem in the development of the M3 was the engine. The 3.2 Liter with 321 hp is pretty much at the top of it's capacity. ... But the new M3 needs more power, first because of the reasons mentioned above, second because the car's weight increased, and third to not let the gap to the 400 hp M5 become to big. As an alternative, the M-Developers thought about creating a new V8, a small brother of the M5. The considered parameters: 4.0 Liter displacement, 350 hp with the option for more. But when calculating the cost, the idea with the V8 disappeared faster than an M3 accelerates. About 150.000 German Marks the Super-M3 would need to cost. 10.000 Marks more than an M5. Estimated world wide sales: about 20 cars per year. Conclusion: A new M3 with the old engine - or none at all. ... The engine is extended to 3.4 Liters. The output grows to 340 hp, the maximum to torque 370 Nm. [...] The performance is on the level of the M5. Acceleration 0-100 kph in about 5 seconds, the top speed remains being electronically limited at 250 kph. ... When the delivery of the M3 starts in late summer 2000, the price is supposed to be "just under 100.000 German Marks", so about 99.999 ... "