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    This E36 M3 R is one of the rarest of the rare, but that didn’t stop one owner beefing it up to be a full-on track terror. Words and photos: Chris Nicholls.

    FULL-ON BMW-E36 / BMW-M3 R Hardcore Australian special

    GYM JUNKIE UNICORN Ultra-rare E36 M3 R from Oz

    Just 12 E36 M3 Rs were made available to the public back in the mid ’90s by #BMW Australia. Built, as some of you may know, to be the ultimate non-GTR E36, the cars were basically Group N racers for the road. They came with full Motorsport Group N suspension, a tweaked engine putting out 325hp (more than any E36 M3 other than the GTR), AP Racing four-piston brakes all-round, the full M3 GT bodykit, plus Super Tourer wing and extendable splitter, and almost all creature comforts, such as rear seats, air-conditioning and fog lights, removed. Developed by the legendary Paul Rosche, then M GmbH’s head of motorsport, and team members from the famous Australian Frank Gardner’s outfit, including Ralph Bellamy - former F1 engineer and one of the men responsible for inventing ground effects at Lotus - the M3 R remains to this day arguably the greatest E36 variant you can actually buy, albeit one that required a racing license when purchasing it new and one that is, unsurprisingly, also climbing in value today.

    Which makes it all the more bizarre that this M3 R’s previous owner, Alan Palser, decided to tune it so much there’s basically nothing left of the original car bar the little silver build plate on the centre console. To whit, there’s the DTM Fiber Werkz widebody kit, JRZ dampers with Eibach springs, Turner front and SM Motorsport custom rear anti-roll bars, SM Motorsport custom control arms, Alcon monobloc front and AP Racing rear calipers and two-piece slotted discs, AP racing twin-plate clutch, boot-mounted Speed Master fuel cell with Bosch 044 pump and swirl pot and a range of engine mods, including a very sexy CSL-style carbon airbox, which bring the power up to around 370rwhp. In a car running Hankook slicks on its 11x18” Apex EC-7 wheels, and weighing only 1220kg thanks to being completely stripped and caged, that makes this is one rapid racer indeed. But one that isn’t really much of an M3 R anymore.

    So why did Alan do it? Well, there were two main reasons. The first is an all-too familiar story. Having fallen in love with BMWs as a lad growing up in the Group A era, Alan decided he had to have one, and eventually managed to fund the purchase of his third-hand M3 R ten years ago when it had just 40,000km on the clock. However, as one does, he started to chat more and more to people in the club scene and eventually got talked into attending a few track days. And that’s when the bug bit, hard.

    “At the time I bought it, I would say the plan was to have it as a road car, but having started to talk to some people in car clubs, they said, ‘Oh, you should come down and join the club and have a go on the track on a club day’. Then once I’d done that a couple of times, I thought, ‘Oh yeah, I think I’m going to enjoy this’. So I once I’d done a couple of those, I started orienting the E36 more towards that and less as a car to drive on the road.”

    And once Alan started, he found it hard to stop, spiralling down that route we all know of upgrading ever more bits and pieces. “Once I was on that path, it was easier to continue on it, rather than scrap it and go back to a start point again,” he says. Eventually, after entering a couple of tarmac rallies, Alan decided it was time to develop it fully and, having sent it off to BMW whiz Sam Markov at SM Motorsport in Wodonga on the Victoria/New South Wales state border, things just got even more extreme, eventually leading to a wilder state than it is in now (this engine is its second after the previous fully-built and E85-tuned beast blew prior to the sale to its current owner). As for the second reason, that was more to do with the used car market at the time. Although it might seem silly in today’s climate, despite its rarity, engineering pedigree and extremely finely-honed nature out of the box, the M3 R wasn’t actually all that valuable ten years ago. You could pick one up for less than AU$50,000 (around £25,000) and there wasn’t a sense that they would be a future collectible. Hence why Alan says “I didn’t feel like I was totally killing something that was worth a lot of money at the time.” Of course, thinking about it now, he agrees that were he to do it all again, he would have started with a basic 3 Series shell, but such is life.

    Eventually, having arrived at a development crossroads, Alan was unsure whether to replace the engine with an S85 V10 or the like, or sell it to fund something like a Z4 GT3. In the end he decided to part with it, which is where current owner and Avis franchise holder (hence the stickers) Les Sears comes into the picture. A Holden man for much of his time in motorsport, one drive of an E46 back when it was new changed his life forever and after that, Les became a devoted BMW fan, building up quite an impressive collection that currently includes a stock E36 M3, three E46 M3s (one road car, one complete racer and another in the build) and an F82 435i daily. Hence why, when he found out this car was up for sale about a year and a half ago, knowing how rare it was and how much effort had gone into it, he pounced on it.

    Of course there was still the matter of the blown engine to take care of before he could enjoy it at his local motorkhanas and track days, and given the previous highly-strung motor’s issues, and the fact the chassis set-up was good enough to ensure speed without huge power, Les decided to tone down the new power plant a little in order to keep it reliable. Thus, right now, it runs a completely stock 3.2-litre bottom end, and only the aforementioned carbon airbox with custom trumpets (on stock runners), K&N pod filter, ARP rod bolts, 296º Schrick cams, Vanos delete and Motec M600 ECU as mods. Despite this, thanks to Sam Markov’s nous (Les kept him on as the car’s mechanic, as unlike for Alan, Sam was local), the car puts down 367hp at the wheels, which as we said is still plenty in a circa-1200kg car, and easily enough to keep Les at the top of the time sheets at whatever event he enters. “Everywhere you take it, if it doesn’t win, it’s always second or third. It’s a quick little car. It’s very, very well balanced, and it doesn’t do it with horsepower, it does it with cornering speed,” he says.

    Despite its pace and the fact it’s no longer much of an M3 R though, Les has no desire to risk such a rare car (even in its current state) in actual racing, saying “I’m a little reluctant [to race it]. I don’t mind doing the sprints in it, but once you get into a race meeting, I’d hate to damage it. I’ve got an E46 [an ex-Targa Tasmania machine, no less] which can take a bit of a hit and it’s easy to panel beat, but this thing with that body kit on it, it’s quite hard to start rebuilding that. I’ve got a new E46 being built as we speak too, and when that’s finished I’ll put this car up on blocks and leave it there and won’t race it at all”.

    Now, given he’s only had the car for less than two years, such a plan might sound impossibly sad, but it’s actually part of a grander scheme to leave it in as good a condition as he can for his son, who also races. Essentially, Les says that he’ll take the M3 R out every so often just to keep it running until his son takes it over, and continue racing in the new E46 once that’s built. “It’s a new shell that we’ve got in another shed with a new cage through it and I’ve bought all the parts for it. I’ve just got to assemble it, basically,” he says. “I’ll do that the same way - it’ll have a 3.2-litre in it, but the bottom end won’t be stressed out and we’ll just get it to breathe.”

    Hopefully both cars can see the use they deserve for many years to come, as although Les is now 69, he has no plans to stop racing anytime soon, and that’s the sort of thing we love to hear. If, however, he does eventually decide to give the game away, not only will he have his son to look after the cars, he’ll also still be able to enjoy them in other ways, saying that “I just get a kick of out of being in the shed and having a cup of coffee with the cars… And they’re not as noisy as the wife!”

    S50B32 straight-six has been fitted with #VAC Vanos delete kit, among many other mods, and now makes 367whp.

    Carbon blanking plates are most definitely at home in the stripped-out interior.

    “Everywhere you take it, if it doesn’t win, it’s always second or third. It’s a quick little car”

    DATA FILE / #BMW / #BMW-E36 / #BMW-M3-R / #Apex / #BMW-M3-R-E36 / #BMW-M3-E36 / #Motec-M600 / #Motec / #BMW-3-Series / #BMW-3-Series-E36 / #BMW-3-Series / #BMW-3-Series-M3 / #BMW-3-Series-M3-E36

    ENGINE AND TRANSMISSION 3.2 litre straight-six #S50B32 / #BMW-S50 / #S50 , #K&N pod filter, custom carbon airbox with OEM runners and custom trumpets, #Schrick 296º cams (inlet and exhaust), #VAC-Motorsports Vanos delete kit, #ARP rod bolts, #NGK spark plugs, #Bosch-440cc /min injectors, Bosch-044 fuel pump, custom swirl pot, #Speed-master fuel cell, Evosport underdrive pulley, Turner Motorsport solid engine mounts, SM Motorsport stepped headers, custom 2.5” stainless steel exhaust and silencer, #Motec-M600-ECU . Five-speed manual gearbox, #AP-Racing twin-plate 7.25” clutch, stock M3 R flywheel, #OS-Giken-LSD

    CHASSIS 11x18” ET25 (front and rear) #Apex-EC-7 wheels in Anthracite with 20mm spacers (front and rear) and 280/650 - 18 Hankook slicks (front and rear), #JRZ-RS dampers with #Eibach springs, #Turner-Motorsport (front) and SM Motorsport (rear) anti-roll bars, SM Motorsport custom front suspension arms to increase track by 100mm, #SM-Motorsport custom rear trailing arms, SM Motorsport custom bearings and rod-ends, Whiteline front strut bar, Alcon monobloc four-pot calipers with 355x32mm two-piece slotted rotors and Ferodo DS1.11 pads (front), AP Racing four-pot calipers with 330x28mm two-piece slotted rotors and Ferodo DS2500 pads (rear), AP Racing fluid, SM Motorsport custom braided lines and custom pedal box

    EXTERIOR DTM Fiber Werkz wide-body kit (customised by SM Motorsport), custom Topstage Composites front bumper and carbon splitter, #APR-Performance rear wing

    INTERIOR Brown Davis roll-cage, short-shift kit, RPM SL S/W Comfort suede steering wheel with quick-release hub, Velo Apex-XL seat, Sparco harnesses, carbon blanking plates for centre console and gauge pod, Racepak display
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    The hottest E36 – the brilliant M3 R White Gold.

    One of the rarest of all E36 M3s, and some might say the best, came from Australia: the brilliant M3 R. The very best E36 M3 didn’t come from Europe, or America… it came from a land Down Under. Words and photography: Chris Nicholls.

    Mention special E36 M3 derivatives and most people’s minds will inevitably go to the M3 GT or Lightweight. After all, these sold in relatively large numbers and, thanks to being designed for BMW’s two largest markets (Europe and the US respectively), got the most media exposure. However, the rarest, most powerful E36 M3 ever made (GTR aside) didn’t come from either of those continents. It came from the relatively tiny market of Australia, where, in #1995 , a highly talented group of people from both within and outside the company came together to build 15 very special M3s. These came to be known as the M3 Rs.

    Now, some of our regular readers may already know about the M3 R, especially as we featured another one back in (March 2006), but given the time gap, we thought it was best to look at it again because it is without a doubt one of the best factory M3s ever made.


    The M3 R story first dates back to mid-1993, when BMW Australia investigated the possibility of building a near race-spec M3 for the road, the idea being that they could be sold to enthusiasts who tracked their cars on the weekend or even competed in state and national events. The payoff for BMW Australia being a homologation special that it could develop for Australian GT Production car racing.

    Having been given the green light, the local BMW team worked closely with the legendary Paul Rosche, then M GmbH’s head of motorsport, and team members from the famous Australian Frank Gardner’s outfit, who ran the Australian M Team at the time, to help design, develop and spec the cars. It’s worth noting before we go any further that one of the Gardner staffers was Ralph Bellamy, whom older readers and F1 nuts may remember as chief engineer at Brabham, McLaren, Lotus (where he, along with Colin Chapman, Peter Wright and Martin Ogilvie invented ground effects), Lola and Fittipaldi, before moving onto BMW M to work on the international Super Tourer programme. So, as you can see, when we said a highly-talented group of people helped make this car, we weren’t lying.

    As for the car BMW Australia ended up producing, it really was a road-going racer. The air conditioning and stereo were removed (although, as usual, owners could refit them) and sound deadening, central locking, foglights, rear seats and the on-board tool kit all went, too. Even with the standard twin fire extinguishers (although obviously not the optional bolt-in roll-cage) the end result was a car that weighed nearly 200kg less in its most hardcore form than a stock M3.

    Of course, the modifications didn’t end there. The engine gained more aggressive camshafts, shorter intake trumpets and a different cold air intake that drew from where the driver’s side fog light used to be, as well as a Motorsport-designed sump and dual oil pick-ups to avoid the common S50 30B starvation issue. On top of that came a lighter flywheel (matched to either an AP Racing 7.25-inch sintered twin-plate racing clutch or a cerametallic twin-plate for road use) and new management software to yield an overall output of 325hp – more than any non-GTR E36 M ever sold elsewhere. It goes even harder than the weight and power would suggest, too, thanks to a shorter-than-standard 3.25:1 final drive ratio.

    Unsurprisingly, the brakes also copped significant upgrades in the form of AP Racing four-piston callipers, two-piece vented rotors, Pagid RS 4-4 pads and front cooling ducts that ran from holes next to the now-deleted foglights. As for the suspension, almost every part was replaced with Group N Motorsport parts, right down to the hubs, which run different length studs (not bolts) front and rear to hold the unique 17-inch staggered BBS wheels. To ensure the looks matched the potential, the team also fitted the M3 GT body kit in its entirety, plus the Super Touring dual-level rear wing and a sliding front splitter. The whole lot was assembled at the BMW Australia Performance Driving Centre under the close supervision of M engineers and Ralph Bellamy himself. Three completed cars went to the local M Team for competition use and the remaining 12 were made available to the general public.

    However, in keeping with the whole ‘race car for the road’ thing, only members of the general public armed with a CAMS (Confederation of Australian Motorsport) racing licence could buy one, unless they were willing to undertake the relevant training and tests before delivery.

    As you can see, the M3 R is thus a rare and incredibly desirable special edition. One designed to maximise driving pleasure both on road and track, and in the sole colour available (Alpine white III), quite the stunner.

    The owner of this particular example (number 14 of 15) is very well aware of just how special it is, too. Ian Burke has been a BMW enthusiast for many years, starting with an E46 323i in 2000, before moving up to an E46 330i three years later. These two impressed him enough that he bought an E92 335i sight unseen before they arrived in the country when the lease on his 330i expired, after which he upgraded to an E92 M3, which he still owns. Burke also has an original M Roadster, has done a factory tour and visited BMW Welt and would have bought an F80 M3, too, until a test-drive convinced him it was “a bit too boy racer-ish” for him. Thus, when he says it provides a special driving experience, you know he’s not wrong: “It’s a treat to drive. I would say on the open road it’s got better shock absorption and handling than my E92 M3. When you go over a bump the shocks absorb everything – they’re quite amazing. It handles extremely well, too. I’ve had it around Sandown Raceway a couple of times, and the performance is not like a modern-day car, although it’s still pretty quick, but the point is that it’s good around there because the braking is so superior to a modern saloon car. You can get the brakes red hot and really stamp on them into a corner and the whole suspension is race-tuned.”


    How Burke came to own this car is a lovely piece of father-son serendipity as well. Burke isn’t really a tech guy – he has no social media accounts at all – but his son, Andrew, like most people his age, is on the web a lot. And unsurprisingly spends a large portion of that time looking at cars. Thus, a while after purchasing his M Roadster, Burke got an email from his son telling him about this example, which at the time resided in Sydney, complete with a link to the advert. “I looked at it and thought it looks pretty cool and that it could be a reasonable investment and a nice car to get around in so I went up to Sydney to see it,” he says.

    The shop selling it was called Classic Throttle Shop, a renowned establishment which houses a huge number of special cars at any one time. Upon visiting, Burke senior was impressed enough by the car that he bought it on the spot and had it shipped back down to his home in Melbourne.

    Not that the car was perfect, of course. The steering wheel leather had a small cut in it, which necessitated refurbishing, and many of the rubber seals were in such bad condition that they had to be replaced. This perishing and the fact the car had only done 17,000km at the time of purchase suggested that the car had previously spent a lot of time in a garage but as it ran fine and all the other components seemed alright Burke wasn’t bothered.

    Once freshened-up, Burke made a couple of small changes to suit his personal taste and needs. First was swapping out the intake system for a lovely Gruppe M carbon number, purchased simply because he liked the noise. Second was the clutch. Apparently the original race-spec version was “virtually undriveable in the city”, so he changed it to a UUC model with a solid lightweight flywheel and an E34 M5 sprung disk.

    Now, keen-eyed M3 nuts might also spot the car came with some non-standard modifications that Burke didn’t make, namely the Remus exhaust and an unknown brand thick alloy strut bar, as well as the original radio/cassette player and air-con, but all of these are minor changes and should he ever desire, Burke can always swap everything back to stock-spec pretty easily, especially as every component on the car has an official BMW part number.

    Rather amusingly, there is one extra part Burke does own that he’d love the put on the car more regularly, but certain family members won’t allow it: a custom numberplate. “I’ve actually got a Victorian licence plate ‘E36 M3R’ but I’m not allowed to put it on because I’d look too much of a tosser,” he says. That said, Burke readily admits that “you’ve got to fly under the radar when you own a car like this”, so he isn’t too fussed – especially as he is allowed to bolt the private ’plate on when he attends the odd #BMW Car Club of Victoria meet.

    “The BMW people know what it is without the ’plates,” Burke grins, “and, of course, when you lift the bonnet up, their eyes pop out of their head when they see the originality of the engine. It’s even got all the original stickers.”

    Remarkably, given his penchant for regular spirited drives, Burke has only put about 4000km on it in the three year’s he’s owned it, but then he also has his M Roadster and E92 M3 on offer as toys, and his daily driver is a VF Holden ute (“it’s so damn convenient to throw all your rubbish in the back”), so perhaps the low number of kilometres travelled are less surprising in that regard.

    As for the future, Burke says he plans to “just sit on it”, especially as S50 engines are so hard to come by these days, and eventually he’ll pass it onto his son. No doubt Burke junior will enjoy driving it as much as his old man.

    “It’s a treat to drive. I would say on the open road it’s got better shock absorption and handling than my E92 M3”

    TECHNICAL DATA #BMW-E36 / #BMW-M3-R / #BMW-M3-R-E36 / #BMW-M3-E36 / #BMW-S50 / #S50 / #S50B30 / #BMW-M3 / #Getrag / #BMW-3-Series-E36 / #BMW-3-Series-Coupe-E36 / #BMW-3-Series-Coupe / #BMW-M3-Coupe / #BMW-M3-Coupe-E36

    ENGINE: 2990cc, DOHC S50 30B straight-six, cast iron block, 24-valve alloy head, 10.8:1 compression ratio, 264-degree inlet cam, 265-degree exhaust cam, oil restrictor in head, Motorsport sump, twin oil pick-ups, Motorsport air filter and intake pipe, Motorsport lightened flywheel (currently UUC solid lightened), Remus exhaust, updated engine management software

    MAX POWER: 325hp @ 7200rpm

    MAX TORQUE: 258lb ft @ 4400rpm

    DRIVELINE: #Getrag-420G six-speed manual, #AP-Racing CP2961 7.25-inch twin-plate sintered (road/race) or #AP-Racing-CP4112 cerametallic twin-plate (road). Currently fitted with #UUC Stage 2 Ultimate clutch with E34 M5 sprung disk. Standard clutch master cylinder with travellimiting stop, E34 M5 driveshaft, 3.25:1 final drive ratio

    SUSPENSION: Motorsport Group N Bilstein dampers, Motorsport Group N springs, Motorsport Group N upper and lower spring plates, Motorsport Group N struts (f), Motorsport Group N upper and lower wishbones (r), Motorsport Group N adjusting sleeves, Motorsport Group N damping sleeves, Motorsport Group N hubs with studs (f&r), aftermarket strut bar (f)

    BRAKES: AP Racing four-piston front callipers with twopiece vented rotors (f&r), Pagid RS 4-4 pads (RS12 optional), front brake cooling ducts

    WHEELS AND TYRES: 7.5x17-inch ET37 (f) and 8.5x17- inch ET41 (r) #BBS mesh wheels with 225/45 (f) and 245/40 (r) Bridgestone Potenza RE-11 tyres

    INTERIOR: Anthracite M cloth/Amaretta suede trim, aircon delete, radio/cassette delete (both since re-installed), rear seat delete, central locking delete, sound deadening removed, twin fire extinguishers (driver’s side removed for convenience), spare wheel delete, jack and wheel brace delete, toolkit delete, boot floor mats and trim delete, limited edition plaque under handbrake

    EXTERIOR: M3 GT body kit, Motorsport sliding front splitter, Motorsport Super Touring dual-level rear wing, foglight delete (driver’s side replaced with air intake vent)

    “Their eyes pop out of their head when they see the originality of the engine. It’s even got all the original stickers”
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