BMW held the E36 M3 Compact under a lock since 1996 – it was supposed to be an one-off model. According to the company, they wanted to promote this model to the younger people who were just entering the BMW M world.
The head of vehicle prototype building and workshops Jakob Polschak said that “to a certain extent, the M3 Compact can be regarded as the forefather of today’s BMW M2”. The prototype had 321 horsepower, but if the mass production model had happened it would have a bit less.
BMW M3’s second generation was actually understated. It was unveiled in 1992 with a 3.0-liter 6-cylinder engine producing 286 HP and 320 Nm of torque. It was the model which introduced the camshaft control system VANOS and the SMG automated manual gearbox.