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BMW E36 Three Series Compact

In the days before the 1 series and the MINI brand the 3 was the lowest model in the range. This meant BMW had a large chunk of the market it wasn't able to sell cars to, there was no VW Golf competitor. BMW had made a three door hatchback before, the 2002 touring in the 1970s. The original plan for the E30 touring had been a three door car but only a few prototypes were constructed. Similarly a three door E21 had only two or three cars produced. Against this background the E36 Compact was born.


BMW E36 318ti

318ti with Motorsport body pack.

To compete the car would need to be cheap and fun to drive, it would be the only rear wheel drive hatchback on the market and if done right it would sell well to keen drivers. The Z3 shares the same floor pan and mechanicals and this would also have a bearing. BMW used the less expensive and more easily packaged E30 rear axle and suspension with it's semi-trailing arms. This was called a cheap tactic by the motoring press, but that was the whole point.

Engines would be the 1.6 litre (later 1.9) 8 valve M43 and the excellent M42 / M44 16 valve series. European buyers would get an M52 323i car which was sadly never sold in the UK or USA. For more economy minder owners an M41 318tds would be available and proved to be a good seller.

The Compact's interior would differ from the rest of the range by having a unique dashboard. I can only assume this was done to differentiate the model as there could have been very little in the way of cost saving in this move. The rear seat would have a 60/40 split and when folded gave a usefully sized load bay with good access. Like the Z3 the spare wheel lived in a plastic tray under the car, this means it never gets inspected and rusts nicely as well as being flat.

BMW E36 318ti

AC Schnitzer styling and wheels.

Performance of the 318ti was similar to the 318iS coupe which was almost the same weight. The handling depended on the view of the reviewer however. Some would say it lacked the surefootedness of the other E36s particularly in the wet, they were correct. Others would say the E30 back end made the car more fun to drive when pushed, they too were correct. It's this which made the Compact a cult car which is still popular today - it was fun to drive in a way most modern cars aren't.

Many Compacts with sold with steel wheels, no fog lamps and few other options to the bottom of the company car market. Later in the model's life BMW added more standard equipment such as air conditioning and sold a model with a leather interior. They version were sld as Lux pack or SE models. They also did a Clubsport version with the Motorsport body pack, 16" five spoke alloys, sports seats (often half leather) and stiffer suspension. A rare model in the UK is the California edition with a full length Webasto style fabric sunroof, it was sold here but the British climate does it no favours.

BMW E36 318ti california edition

California edition with full length fabric sunroof.

A euro only 323ti conversion was the most powerful Compact using the 170bhp M52 2.5 litre engine. It had a rear mounted battery to help balance the weight of the larger power plant. There was no 2.8, perhaps BMW thought this would make the car a bit too tail happy! Now you can find Compacts with a 2.8 or even an S50 conversion with the M3's engine. Some tuners even made V8 editions and just prove it was possible there was even a V12.

The M44 16 valve engine was sadly laid to rest in 1999 when the last of the 318iS were replaced by the new E46 318Ci and it's Valvetronic N42 engine. This was judged too expensive for the Compact and it got the 8 valve M43TU 1.9 until the end of the model run as did the Z3.

The Compact never sold well in the USA but was popular elsewhere. Perhaps the car was too down market for US tastes or maybe the dealers didn't think they'd make enough mark up from it. The remaining examples are keenly sought by enthusiasts across the Atlantic, especially the Clubsport. The later E46 Compact was never sold in America.

There is still a place for the 318ti today. E30s are much in demand and prices have risen accordingly, at the time of writing a nice E30 318iS will fetch 5000 pounds and a 325i Sport can get over double that. A good 318ti can be had for under 1000 and has much of the handling fun of the E30 but with sharper steering and much better brakes. BMW even ran a Compact racing series in the UK. They're economical to run too and would be a perfect commuter car for those who enjoy driving.

UK Packages

Lux Package

Microfilter, Auto dimming mirror, Headlight washers, Front fog lights, Interior extra lights pack (standard on 318ti), 15" alloys, On-Board Computer OBC, Park distance control, Rear head rests, Electric sunroof


SE Package

Microfilter, Auto dimming mirror, Interior extra lights pack (standard on 318ti), Park distance control, Electric sunroof


Sport Package

Colour coded bumpers and skirts, 16" alloys, Sports seats, Sports suspension, Front fog lights, Electric sunroof

BMW E36 318ti m44 engine

M44 1.9 16 valve engine in a 318ti, the perfect combination.