In 2002, BMW upgraded the third-generation E46 M3's S50B30 engine and named it the S54B32.
It features a 3.2-liter inline-six naturally aspirated engine with reinforced engine components, Double VANOS system on both intake and exhaust sides, electronic throttle, and new electronic programming. These enhancements allowed it to achieve a maximum power output of 256 kW (348 hp) and a maximum torque of 365 Nm, resulting in a specific power output of 80 kW per liter (108 hp per liter). At that time, it was BMW's most powerful naturally aspirated engine with the highest specific power output, and it was also the last generation of inline-six naturally aspirated engines used in the M3. As the only remaining gem in the BMW Z-car lineup, this engine was also installed in the Z4 M model released in 2006.
BMW once confidently declared that it would not utilize turbocharging technology, but eventually had to compromise due to market demand. In 2008, with the introduction of the fourth-generation M3 equipped with the S65B40A 4.0-liter V8 engine, BMW announced that the legendary S54B32 engine had completed its historical mission and officially retired. This news left BMW M3 enthusiasts around the world almost sighing in disappointment.
