A Tuner’s Guide to the E46 M3

jet black e46 m3
Modified E46 m3 on BC Racing Coilovers

In this guide, we’re going to break down tuning of the 2001-2006 BMW M3 into different categories of interests from the engine to transmission, chassis, suspension, brakes, wheels and tires.

This guide is intended to assist those who are new to the E46 M3 and help them make sound decisions when it comes to improving their car. This guide has been put together using resources from the BMW community (M3cutters, M3forum, NAM3 Forum) and personal experiences with my own E46 M3’s (my 2004 and 2003).

To use this guide, follow the links at the very bottom, or navigate to areas of interest using the ‘Navigate To’ box below. Not all pages may be available at the time of this release. We’ll start with one area and then release the next.

First up, the 2001 Engine of the Year award winner, and 6-time winner of the 3 to 4 liter category — the BMW S54B32! But you can call it the S54.

Let’s go!

The S54 engine is the heart and soul of the E46 M3


Years of developing the inline six engines in the second generation E36 M3 culminated into the S54. The S54 is the 3.2 liter inline six engine found in the E46 M3 and the Z4 M. It’s essentially the big brother of BMW’s M54 engine, but built off of the S50 and S52 engines from the E36 M3.

In North America, all E46 M3’s came with the S54B32 configuration. There is S54B32HP variant, too. The HP stands for “high performance”, and was exclusive to the E46 M3 CSL.

This article covers the S54B32. We’re not going into detail of the S54 engine, just covering the basics.

Out of the box, the S54 produces an advertised 333 BHP at 7,600 RPM with an 8,000 RPM redline. BHP is the power produced when measured at the flywheel. Once power is transmitted through the transmission, axles, wheels and to the ground, a measurable percentage of that power will have been lost. When a car hits the dyno, it’s measuring power at the wheels. That’s why it’s called wheel-horsepower, or WHP. A factory E46 M3 should put down somewhere in the neighborhood of 280 WHP, give or a take a few depending on the type of dyno and it’s calibration.


While the S54 engine won International Engine of the Year award 6 years straight, it wasn’t perfect. Check or replace rod bearings, rebuild the double VANOS, check for broken cam tabs. Then you’re good to go to power upgrades.

Power Upgrades

Straight to the point. Factory E46 M3’s put down about 280 WHP. Don’t expect much more than 330 WHP out of an E46 M3 without dumping a great deal of coin.

Sticking to naturally aspirated power increases, if the motor has good compression, swapping for a catless header and a good 93 octane tune should increase peak power to roughly 320 WHP. That’s +35 WHP to start, and about 20-25 of that can be had from just a tune alone.

Achieving 320 WHP will likely cost $1,500 in parts alone. Getting to 340+ WHP will likely cost an additional $5,000.

The cost of superchargers begin around $7,000 for an entry level kit and should produce over 400 WHP. For this reason, many M3 owners go straight to forced induction. Turbo setups are out there, mostly custom, but may cost $20,000 or more.

Before we get started, don’t even bother with Dinan. Other than their big bore throttle bodies, nothing else they made is desirable today.

Josh’s 2004 BME M3 on the dyno


Arguably the most critical aspect of making more power. with the S54 engine is the tune. When wringing out the most power from a high strung engine like the S54, it’s never been more true.

A good engine tune on an otherwise stock engine could gain 20+ WHP and a slight bump in mid-range torque.

The thing about power modifications is that, as you’ll read in this article, each component individually contributes to the overall package but requires a tune to get the most output.

Use of higher components here, a better component there, and what you could see in the end is a significant difference when compared use of lower end components. The difference could end up with a 340 vs 360 WHP.

An engine tuner puts all those parts and labor hours together to maximize engine torque, peak horsepower, all within an acceptable limit of risk to the engine. Some tuners live in the danger zone to win a dyno award or sell more tunes by eliminating safety features such as knock sensors.

Note that most of the peak power is a result of tuning, and peak power increases from 7,600 RPM up closer to 8,200 — which is about the safe limit to rev out these motors.

Choose your tuner wisely.

Personally, I’m considering HTE and Stage FP for remote tuning. You can also get off-the-shelf tunes from companies like Build Journal, Epic, and more — just realize that those are canned tunes that will increase power, but won’t net the gains like a refined custom tune.

Underdrive Pulleys

Underdrive pulleys reduce strain on the engine by reducing the speed of the accessories like the water pump and alternator. These usually come in a kit of several pulleys designed to work together. They’re also cheap — around $200 or less depending on the sale.

Our suggestion: Grab the Turner Motorsport Power Pulleys in the Street configuration and net around 7-8 WHP. It’s available in a race version, which advertises upward of 10-15 WHP, but isn’t suitable for a street car due to the reduced output of the alternator to supply enough charge at the lower RPMs a street car would see. Underdrive pulleys are available from other manufacturers as well. I just happen to run Turner’s.

Header and Section 1 Exhaust

European vs North American E46 M3 header

Combined with an engine tune, upwards of 35 WHP can be gained by replacing the factory catted header with a catless aftermarket header, or a header from the European M3 models. Swapping out the header without a tune may only net 10-15 WHP. You can read about the time I swapped headers on my 170k mile M3 and made 320 WHP with no other engine modifications.

On European M3 models, BMW positioned the catalytic converters on the connecting pipe, referred to as the Section 1. If you go with a catless header, you’ll want to pick up a catted section 1 pipe to remain emissions compliant. But please check your local laws first!

Expect to pay $800 or more for a used take-off header from a European M3. We see that aFe has an exhaust manifold with built-in high flow 400 cell cats that advertises a gain of 15 WHP. While explicitly not CARB exempt, I’m betting it would pass the visual test.

If eliminating the cat from the header, please don’t add a catted section 1 pipe! Cost varies but expect to dish out another $800 for a European pipe, that is, if you can source one. A good alternative may be to have two catalytic converters added to the factory section 1 pipes. This should could be done at any reputable exhaust shop for a bit less.

Our suggestion: save money by purchasing a new Megan Racing header for around $280. It’s rare to suggest eBay parts but the Megan Racing header has been proven in the BMW community to have a good fitment and produce equal power to the European header. It’s a knock-off of the Active Autowerke header, which is a rip off of the factory European header.

The aftermarket is filled with header options. These are just a few. If you want the best of the best, capable of squeezing out the extra few ponies, be prepared to drop $2,000 on a SuperSprint’s stepped header. You’ll then want a full 2.5″ exhaust the remainder of the way back.

Support us by getting your exhaust parts here

Intake Airbox, Elbow and Air Filter

The S54 engine has 6 individual throttle bodies and are connected to an airbox. This is unlike a typical intake manifold, which would bolt directly to the head, with a single throttle body opening a flap in front of the manifold opening to let air in. On the S54, the six throttle bodies are connected directly to the head, and the airbox surrounds the throttle bodies, and has a large opening on the other size that goes to the air filter.

Believe it or not, the factory plastic airbox on the E46 M3 is very well designed. To boost power, the plastic airbox can be replaced with the S54B32HP carbon fiber airbox that came on the E46 M3 CSL.

The CSL style airbox eliminates the MAF sensor, so it also requires special MAF-less tuning often called “Alpha-N”. An air box like this could net another 15-20 WHP.

The thin walled carbon fiber airbox reverberates and produces a glorious intake growl the likes of which few engines ever could! Plan to spend close to $2,500.

In our opinion, it’s simply not worth it.

Our suggestion: If you just want more induction sound and an ever so slight bump in power, here’s what you do:

First, replace the plastic intake elbow with a smoother unit from aFe (I did) or similar. Then, swap out the airbox and air filter. The aFe and K&N kits are popular options under $500. If you have $1k to spend, look at the Eventuri. Build Journal has a review that shows an 8 WHP gain, which I think is slightly more than you should expect from the cheaper options.

Dinan’s big bore throttle bodies are advertised to gain 4-8 WHP. They’re also $1,200, if you can find a set, and require an engine re-tune. Pass on these unless you’re going full bananas.

Support us by getting your intake parts here


Performance camshafts maximize power by controlling the opening and closing of the valves. The greater the lift, the further open the valve, allowing more air to enter or exit the chamber. The duration determines the ramp up, how slow or quick, the valves open, how long they stay open, and how quick or slowly they close.

As of this writing, Shrick and Cat cams have become wildly popular in the M3 tuning community. The general consensus is that for a street car, a 280/272 grind is about ideal. 288/280 is also popular, but may not provide the low end torque or drivability of the 280/272’s.

Look to spend around $1300 for cams, and depending on the grind, another couple hundred for supporting hardware. Labor rates may vary but you’re probably looking around $2,500 for cams installed. The engine will definitely require a custom tune to get it running optimally.

370 WHP from European headers, CSL airbox, and Shrick 288/280 cams

The gains realized with cams really depend on the other supporting modifications. Cams for a naturally aspirated engine may be entirely different than a cam designed for forced induction. While there isn’t an order of operation to modifications, more than one reputable tuner has suggested cams before swapping to a CSL style airbox.

In the dyno sheet above, the owner stated the car had put down 325 WHP prior to the Schrick cams from the same tuner on the same dyno. If true, that’s 45 WHP from the cams and retune. Also, for reference, the S65 powered M3’s put down about 370 WHP from the factory.


All of the above modifications should be net in the 360-370 WHP range on 93 octane. Take advantage of E85 fuel and an E85-specific tune to further advance timing, and you might see 380 or more naturally aspirated WHP.

Off the shelf kits from APE and AFD are available that allow for E85 fuel to be used on the E46 M3 without overhauling the entire fuel system.

Stroker Kits

If you absolutely must go for broke, stroker kits, such as those from VAC Motorsports or Lang Racing, are available to increase displacement up to 3.5 liters. Expect those engines to produce well over 400+ WHP with all of the aforementioned modifications, all at the expense of longevity.

Forced Induction

Dyno of ESS supercharged E46 M3

The easiest way to big power numbers is a supercharger. The great thing about superchargers is the power delivery. Because boost pressure builds with RPM, the power builds linearly, and is much more street-able than a turbo. A turbo could build boost quickly, and at a much lower RPM, resulting in a onslaught of torque.

Don’t worry about the engine with a supercharger. The S54 has been known to take upward of 700 BHP horsepower without digging into the internals and most off-the-shelf supercharger kits aren’t going to support that power figure anyway.

Active Autowerke, ESS Tuning, RMS, and VF Engineering have you covered with supercharger kits advertised up to 575 horsepower (BHP) with their out-of-the box generic tune. These tunes will get you up and running safely.

I mentioned tuning previously and it’s never more important than with forced induction. A good tuner, optimal fuel, and some tuning revisions could increase the power of a 575 horsepower kit well into the mid 600’s on 93 octane. Go with an E85 blend and you could be knocking on 700.

Closing Thoughts

Two decades of a incredible BMW communities have driven an aftermarket that has shown us just how amazing the S54 engine truly is. It’s capable of producing supercar-like response and power output from a small displacement, and delivers an exhilarating driving experience on the street.

Personal opinion: While the S54 can squeeze out 600 horsepower or more, the sweet spot for the E46 chassis is 400 WHP.

Not All Dynos and Engines Are Equal

Everything you’ve read here is simply a guide. There will be outliers. Two identically built engines may not produce the same WHP figure. Every dyno measures torque and has a configuration to convert it to a standard that could be different than the next.

The quality of the parts can be the difference between mediocre and top tier numbers. That could also be the difference of spending $5k in parts versus double or even triple.

Tell us about your S54 build and power figures by leaving a message below!

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Engine | Transmission (coming soon) | Chassis (coming soon) | Suspension (coming soon) | Brakes (coming soon) | Wheels and Tires (coming soon)

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