Here's something that will make your brain hurt: BMW isn't in business to produce cars. Shocking, right? Like every company, its primary goal is to make a profit, and making cars is just a means to making money. This is what we call capitalism.
For that reason, car companies will produce a model only if they can sell it in sufficient numbers to turn a profit. Often, any enthusiast bent is watered down in favor of features that appeal to the broader public. This is a slippery slope with a shiny new Toyota Camry parked at the bottom. Great car, big appeal, huge profits, but nothing that enthusiasts dream of.
Over at BMW's M division, the dream has always been preserved -- at least to some extent. The first full-fledged M car, the M1, was a racing homologation special; it was almost all dream and no mainstream. The M1 didn't make it to America (officially), but a few years later, the E30-chassis M3 did, and you can imagine the dealers' angst: it was 95 percent race car for the street and 5 percent uh-oh, how are we gonna sell this thing? After all, its buzzy four-banger had two fewer cylinders than the sonorous 325i, it was barely quicker in a straight line, and it was vastly more expensive.
BMW was worried that it wouldn't be able to sell the 5000 M3s worldwide that it needed for racing homologation, but as it turned out, 18,000 of them rocketed out of dealership parking lots -- at full opposite lock, one would hope. Through the thick clouds of pungent tire smoke, however, the only thing the corporate guys smelled was money.
The follow-up M3 was a brilliant car, but it was a totally different animal. Whereas the E30 M3 made no sense to run-of-the-mill 3-series shoppers, the E36 M3 was designed to be the 3-series that even entry-level 318i buyers aspired to. To that end, it was 50 percent real M car (the chassis and suspension) and 50 percent make-it-sell-big! That meant other 3-series attributes remained intact: six-cylinder smoothness, automatic transmissions, four doors. Oh, and to keep it inexpensive enough to sell to cheapo Americans, we didn't get the real M engines, just made-over, bigger-displacement versions of the existing 3-series powerplants.