The E36 M3 succeeded the E30 M3 at a time when BMW was withdrawing from the Deutsche Tourenwagen Meisterschaft, shifting factory motorsport focus to the 318i and 320i in the Super Tourenwagen Cup. The new car was released initially as a coupé, with a convertible added in 1994 and a saloon in December 1994 — the saloon filling the gap left by the absence of an E34 M5 successor during those years.
In September 1995 a facelift version was introduced, upgrading the engine displacement to 3.2 litres, the manual gearbox from five to six speeds, and adding clear indicator lenses and different wheels. The facelift also introduced an SMG automated manual gearbox, the first automated option on an M3 outside the United States.
The E36 M3 is powered by the BMW S50 straight-six engine. The initial 2,990 cc version produced 286 PS at 7,000 rpm and 320 N·m at 3,600 rpm in most markets. The 1995 facelift upgraded to a 3,201 cc version producing 316 PS at 7,400 rpm and 350 N·m at 3,250 rpm. North American models used less powerful US-specification engines throughout — the S50B30US at 240 hp in the early cars, and the S52 at 240 hp with higher torque from 1996 — in order to keep the US retail price competitive.
The 1994 M3 GT was a homologation special produced for FIA-GT class II and IMSA GT racing, limited to 356 left-hand-drive cars for mainland Europe plus 50 right-hand-drive cars for the United Kingdom. All came in British Racing Green, with power raised to 295 PS, aluminium doors, adjustable aerodynamics, and a derestricted top speed of 275 km/h.
The M3 Lightweight, offered only in the United States in 1995, deleted air conditioning, radio, leather seats, and other equipment to reduce kerb weight by 91 kg versus the standard car. Approximately 125 were built.
The M3-R, sold by BMW Australia in 1994 to qualify for the Australian Super Production series, produced 240 kW — the highest output of any production E36 M3. Fifteen examples were built; four raced, eleven were sold to licensed buyers.
The 1993 E36 M3 GTR, produced as a single road-going example, was built for the ADAC German GT Cup with a widebody kit, seam-welded body, and a stroked 3,018 cc engine.
The E36 M3 GTR won the German ADAC GT Cup in 1993, driven by Johnny Cecotto. In the United States, Prototype Technology Group Racing ran the car in the IMSA GT Championship, winning the manufacturer's title in 1996 (4 class wins in GTS-2), 1997 (8 wins in GTS-3, Bill Auberlen winning the driver's title), and 1998 (5 wins in GT3 and 4 in GT2). The E36 M3 also took one win in the 2000 American Le Mans Series GT class.
Production ran from September 1992 to August 1999, primarily at the BMW Regensburg factory, with a small number of low-compression right-hand-drive cars assembled at BMW's Rosslyn, South Africa plant. Total production: 46,525 coupés, 12,114 convertibles, 12,603 saloons.
The E36 M3 broadened the M3's market reach dramatically through its saloon body style and its availability across North America, Europe, Australia, and Japan. The shift to a straight-six engine established a configuration that would define the M3 through the next two generations and, in turbocharged form, beyond.