The BMW E46 is the fourth generation of the 3 Series compact executive cars produced from 1998. The BMW Compact (E46) was replaced by the BMW 1 Series in 2004, BMW 3 Series it was also related and based on BMW 5 Series (E39) was similar.
The E46 was released in 1998 to worldwide markets in the sedan body style. In 1999, a coupe and touring body style became available to all markets, and the sedan was released in the United States. The E46 experienced enormous success in all markets and was widely considered the performance benchmark of its class.
BMW M GmbH produced a high performance variant of the E46 chassis, designated the M3. This version had a larger, more powerful engine, sportier suspension, a limited slip differential, and various aesthetic modifications.
The E46 was developed as a modern replacement for the aging and cornered BMW E36 chassis. DesignworksUSA was contracted by BMW to work alongside BMW Group's in house design team to create the exterior body work. Based on the E36 body shell, the design team put an emphasis on improving aerodynamics and increasing the car's aggressive stance.
Since the start of production the entire in-car entertainment system (Radio Function, Navigation System, Television and Telecommunications systems) is based on a very flexible automotive computer system. As a result the E46 models can all be easily upgraded with the newest BMW technologies including BMW's Bluetooth System, the DVD based Navigation system, as well as BMW's CD changers that play MP3s.
An emphasis was put on reducing unsprung weight and increasing structural rigidity rather than increasing power output: the highest displacement model at release, the E46 328, had only 3 horsepower more than the E36 328. To counter this small power increase, the body shell of the E46 was claimed by BMW to be 70% more rigid than the E36's, and aluminum suspension components were used increasingly in order to decrease unsprung weight. In tune with BMW's core values, the E46 was released with a front engined rear-wheel drive layout with 50/50 weight distribution. This balance allows for optimal handling in regards to the drive train layout.
Source: Wikipedia, 2012