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How To Build A Budget E46 Track Car

Austin Parsons

Meet Austin

Austin graduated from the University of Colorado Denver in 2021 with a degree in technical writing and remains in the Denver area. Austin brings tons of automotive knowledge and experience to the table. Austin worked as a Technical Product Specialist at BMW for over 5 years and drives a heavily modified E30 325i with a stroker kit, all of which he built from the ground up.

It’s no secret that the 3-Series chassis is a fan favorite for budget track car builds. With other 3-Series options climbing in price to a ridiculous degree, the E46 chassis remains one of the most affordable options for someone looking to have some fun on the track. E46s are also well-balanced, produce ample power, and are extremely reliable, making them the perfect track day starter car.

Since the National Auto Sport Association’s Spec E46 class is the most respected E46-specific racing series and has set out tried and true guidelines for building a well-rounded E46 track car, I’ll be referencing their guidelines quite a bit. They set out to outline the best way to build an E46 track car for the least amount of money, and I respect and agree with their part choices and build specs. With that being said, a Spec E46 car might be a bit tame for some track veterans who are looking for a more visceral experience, so I threw in some recommendations for those folks too. 

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Choosing a Donor

One of the first things that you’ll need to sort out is what type of E46 you’re going to begin your journey with. While that might seem like a pretty straightforward task, there are a couple of factors that complicate things a bit. If you are trying to conform to the rules and guidelines of Spec E46, you’ll have to find either a 330i or 330ci, excluding the ZHP. 

That actually makes Spec E46 one of the most strict BMW spec series, as you can use whatever model you want in Spec E30 and  Spec E36. The National Auto Sport Association says that 330 models have the best power to weight without breaking the bank, which is true, but they have been getting somewhat pricier over the past few years. Obviously, if you aren’t planning on conforming to Spec E46  guidelines, screw the rules.

Compared to the rest of the world, the US got pretty shafted when it came to E46 variants. We only received 10 variants of the E46, excluding the M3, including the 323i, 323ci, 325i, 325ci, 328i, 328ci, 330i, 330ci, 330i ZHP, and 330ci ZHP. While that might seem like quite a few, by comparison to many European countries that got nearly double the amount of variants. 

In the next section, I’m going to cover the basics of choosing between E46 variants and their different pros and cons for a track build but I’m not going to go into too much detail. If you want to learn more about the differences between E46 variants, check out my BMW E36 vs E46 Buyers Guide.

What is the Best E46 Model For A Track Car?

So, like I said, if you intend on competing in Spec E46 or building a car to their standards, you’ll have to start with a 330i or 330ci. And that is for good reason, NASA is right in saying that the 330i is the best starting point for a track car. With 225 horsepower on tap from the M54B30, you’ll not only have the E46 model with the best power-to-weight ratio outside of the M3, but also the model with the most reliable and modern engine. The M54B30 is truly one of BMW’s best inline-6 engines of all time and it is a dependable and smooth powerhouse, perfect for track day fun.

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Outside of the 330i and 330ci models, unsurprisingly, 328i and 328ci models are the second-best option. Only available from 1998-2000, 328i/328ci models used the older-generation M52TUB28 engine, still good for 190 horsepower. While that is still enough power to have fun on track, the M52 can feel a bit lethargic, especially on tracks where straight-line speed matters. Despite the lower power figure, the 328i/328ci and its M52TU engine still features double-VANOS and is extremely reliable in much the same way as the 330i. Additionally, the 328i still used a throttle-by-cable system, which is preferred by most people as it is more responsive than the throttle-by-wire system on later models.

Lastly, let’s talk about the 325i. In most o-track instances, 184 horsepower is going to leave you wanting for more. Of course, if you have modifications planned for your M54B25 powertrain (which is a good engine to modify) that might not be as big of an issue. However, the 325i is about as underpowered as you can go while still having an okay time. That’s why I’m frankly not even gonna bother with the 323i.

Early Considerations

There are some other important considerations that you’ll need to think about besides just the model of E46 that you choose as your blank canvas. The state of that canvas also matters a substantial amount. The condition of your donor car can determine the difference between a fun project and a wallet-draining nightmare, especially if rust is involved. 

It’s important to recognize that E46s are over 15 years old at this point and old BMWs don’t have the best reputation as far as rust resistance and holding up to the elements are concerned. Most established racing programs have safety inspections that ensure that the vehicle is structurally sound, and there are a few areas where E46s commonly fail that inspection. Subframe issues are the most common and dreaded problem on E46s, mainly because it is such a widespread issue. We’ll talk about the issue in more depth in a bit, but it is crucial to look for signs of a cracked subframe before choosing a donor for your track build.

Outside of subframe issues, the E46 is known to have a number of other notable issues that you should look out for before pulling the trigger on an E46. While I won’t go into too much detail here about each of those specific issues, I’ll likely write a full BMW E46 buyer’s guide in the future covering those issues in detail. In general, here are the main things to look out for before buying an E46 for a track build:

  • Rear subframe cracking
  • Compromised rear shock mounts
  • Cooling system issues
  • Valve cover gasket leaks
  • Oil filter housing gasket leaks
  • Rust on rear quarter panels, rocker covers, battery tray

Subframe Reinforcement

It is important to flesh out the E46 subframe issue in a bit more detail since it is such a prevalent issue and one that can directly affect a track car. While most people call this problem a “subframe issue” or “subframe cracking,” the problem is actually with the unibody chassis area called the rear axle carrier panel that the subframe is bolted to. The repeated flexing (strain) of the structure back and forth in cycles causes cracks or tears to form around the subframe mounts. Over time the fatigues get so bad that the subframe mount fails structurally which is a huge issue.

The most unfortunate part of this whole issue is that it basically affected every E46 ever made. There is a lot of back and forth on the forums about whether or not late models were impacted, if convertibles are less affected, and if other factors played a part, it is pretty well accepted at this point that no E46 made it out unscathed.

I’m not going to go into too much detail about the problem here (as I’ll write a dedicated article about it in the future), but it is important to note that regardless of which series you’re hoping to participate in, you’ll need to have your subframe mounts reinforced. That isn’t a cheap endeavor, costing around $3,500-4,000 on average. It is crucial that you loop that into your build cost, as it truly isn’t optional. 

Powertrain Refreshes, Swaps, and Light Modifications

Just like with earlier 3-Series models, power is one of the least important aspects of building a fun E46 track car and I stick by that statement. While there obviously needs to be some get-up-and-go, especially on a 3400-pound car, the real sources of fun come in the form of suspension and chassis mods which we’ll get to in a second. With that being said, it is very important to have a well-tuned and prepped powertrain, whichever engine that may be, that can reliably handle track duty.

This is another area where you’ll have to make some important decisions. If you are intent on sticking to Spec E46 guidelines, you’ll have to make do with all factory engine components and a horsepower cap of 225whp, which is right around where a well-tuned and refreshed M54B30 will end up. In that case, the name of the game is making sure that every aspect of the factory engine is as in-spec as possible.

If you aren’t looking to abide by Spec E46 rules then you have even more decisions to make, especially if you do want more power than a lightly modified factory engine can provide. It has to be said that the E46 doesn’t have nearly the same amount of widely supported engine swap options as many other older BMWs. That isn’t to say that some enthusiasts don’t experiment with swaps, but it’s generally considered to be to expensive to be worth it.

The other option is forced induction, which both the M54 and M52TU can handle to a certain degree. There aren’t any off-the-shelf turbo kits available for the E46, but there are a couple of supercharger options that many claim to be the best bang-for-buck way to get power out of an M52TU/M54.

Spec E46/OEM+ Powertrain

For simplicity’s sake, I’m just going to approach this section from the standpoint that you have an M54B30 to work with, but most of the advice here applies to the other factory E46 engines as well. Spec E46 is very strict when it comes to engine modifications and doesn’t permit any aftermarket bolt-on components (other than the guideline-approved ones) if you want to compete. However, every component in the engine can be refreshed to get it as close to factory performance as possible.

Most serious competitors in the class take that to heart, rebuilding their engines as far as their budget allows. The degree to which you refresh your powertrain in Spec E46 can dictate how competitive your vehicle is in the series. The most important rebuild considerations include a fresh rebore, remanufactured cylinder head including new valves and springs (with everything being re-speced to factory standards), a new camshaft, and rocker arms. Revamping your E46 cooling system is also a must. Spec E46 also mandates that you use an MS43 ECU flashed with Epic Motorsports Spec E46 tune. With those refreshes, you’ll have an M54B30 that comes very close to the maximum horsepower cap.

Spec E30 also mandates that you use a specially designed Spec E46 exhaust which includes a full 3” header back system, including a Y-pipe, a middle section, and a muffler/tailpipe assembly. The part number of BimmerWorld is 176.18.546.0001. Additionally, they also require that you use OEM E36 OBDII headers. Combined, Spec E46 came to the conclusion that the combination of parts provides the best exhaust flow characteristics for on-track performance. That goes for non-Spec E46s too. 

Forced Induction

Forced induction is a debatable topic when it comes to the M52TU and M54. It’s a bit of a catch-22, as forced induction is the only way to make significant horsepower out of an E46 track car while also being nearly as expensive (sometimes more) than the car itself. Both the M52TU and M54 can handle a significant amount of boost, with both being able to handle around 400bhp before encountering issues. However, since both engines have aluminum blocks, they can’t handle as much boost as many earlier BMW inline-6s.

Turbo Setup

There is also the dilemma of choosing between a turbo setup or a supercharged setup. Right off the bat, if easy power is what you’re looking for, a turbo E46 isn’t the way to go. There aren’t any truly quality bolt-on turbo kits available for either the M52 or M54, meaning that most of the work will have to be custom. That adds both complexity and price. 

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Most E46 enthusiasts say that a quality turbo setup will run somewhere in the ballpark of $10,000, which is hard to justify for less than 150 horsepower. It is also important to mention that neither the ZF or GM automatic transmission option can realistically support boost, so you’ll have to consider manual swapping if your starter car is an auto.

If you have more questions about an E46 turbo setup, take a look at this site which covers nearly every aspect of turbocharging an E46.

Supercharger

Supercharging is generally the better option for most people and works better in a track environment anyway. While support for turbo E46 is pretty nonexistent from a manufacturer’s perspective, there are a number of really good options as far as E46 superchargers go. Most of the supercharger options on sale are centrifugal superchargers, making them similar to a turbo setup. Unlike a turbo setup though, an E46 supercharger setup delivers power linearly since they are belt driven. That is a huge plus on the track, as power delivery from a supercharger is predictable and linear, just like the factory M52TU/M54. 

A supercharger is the best way to cross the 300-horsepower barrier with either a 328i or 330i without engine swapping. It is also the most cost-effective, although that isn’t saying much. Most supercharger kits for the E46 still run in the $5,000-$8,000 range. Obviously, that isn’t cheap, but it is the cheapest way to make over 100 horsepower more than the factory engines.

Suspension Modifications

Now that we have powertrain considerations out of the way, it’s time to move on to the fun stuff. Of all of the elements of an E46 track build, suspension is truly the bread and butter. In fact, I’d argue that you can build a pretty decent E46 track car with only suspension-related modifications and nothing else. So, what are the main suspension upgrade options? When it comes to track-appropriate suspension setups, the main two options consist of a nice spring/shock combo or coilover suspension.

Once again referencing Spec E46 guidelines, there is only one approved suspension setup that the actual series allows. It is an upgraded shock/spring setup utilizing single-adjustable MCS 1WNR Dampers and Hyperco springs. It is a tried and true combo of class-leading parts that ensure flat cornering while also being soft enough to daily drive on without any discomfort. Spec E46 also allows for camber plates and unrestricted camber adjustments so you can dial in your setup to best suit you. 

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While the setup itself is extremely good for track driving, the Spec E46 suspension kit that BimmerWorld sells is not cheap, coming in at $4,813.00. The kit comes with additional goodies like camber plates, rear shock mounts (which are also required), new sway bars, and sway bar end links. If you can swing it, the kit comes with everything you need to have a solid suspension setup on your E46.

For those outside of SpecE46, coilovers are a good option. E46 Coilovers are beneficial as they allow for ride height adjustments which you don’t get with an upgraded spring/shock combo. If you aren’t conforming to Spec E30 guidelines, more advanced coilover systems will provide the best handling characteristics on track, but they aren’t the most comfortable on the street. 

Other Suspension-Related Mods

Suspension modifications span outside of just shocks and struts. There are many other important suspension-related modifications that also have a serious impact on how a car handles and are important to think about when building an E46 track car. 

Anti-roll bars are a crucial component when it comes to dialing in a car’s suspension geometry. Anti-roll bars link the suspension on either side of the axle via the control arms in order to significantly reduce body roll, a crucial component for a track car that needs to corner as flat as possible for the best lap times. Adjustable anti-roll bars enable you to dial that characteristic in even further, allowing for improved balance. Spec E46 prohibits the use of aftermarket adjustable anti-roll bars and only allows non-adjustable ones which get the job done just fine. 

Bushings are another important point of discussion, as they can play a big role in handling as well as safety. E46s are at an age where it’s nearly impossible that any of the factory rubber suspension bushings are in good shape at this point. Replacing them is pretty much a requirement if you want your E46 to be competitive. Polyurethane suspension bushings allow less suspension component play and keep suspension geometry in check. They can really tighten up the way that your E46 handles, especially when paired with a good set of coilovers. The main bushings that you want to pay attention to are front control arm bushings, differential bushings, trailing arm bushings, and rear subframe bushings.

I currently have polyurethane suspension bushings installed on my E30 and I could tell an immediate difference in steering directness compared to my old and worn-out suspension bushings. For a couple hundred bucks, it’s a worthy upgrade.

Wheels and Tires

Wheel and tire upgrades are not only one of the most important upgrades for a track E46 (second only to suspension upgrades) but are also one of the most expansive. There are so many wheel and tire options available for the E46 that you can get lost in a sea of choices. While there aren’t any wrong options, there are certainly some guidelines that you’ll want to abide by to get the most out of a wheel and tire combo. 

Reducing unsprung weight is extremely important, as any weight that isn’t supported by a vehicle’s suspension (like wheels and tires) is especially detrimental to handling performance. For that reason, you want the lightest wheels possible on your E46 track car. Spec E46 mandates that wheels must be 17” with a max width of 9”, limiting options somewhat. However, there are still some good options out there like Apex 17×9 ET42 or Kosei K1s. 

Tires are also one of the most important factors in an E46 track car build, as they dictate how much grip you’ll have on track. The options are truly endless here, but there are a few tires that shine above the rest. Spec E46 mandates using Toyo RR 255/40-17  for competition, which is an aggressive dry traction semi-slick race tire. Toyo RA1 235/40-17s are also permitted if you need a bit less sidewall.

If you are interested in learning more about E46 wheels and tires, we wrote an entire guide about it here.

Brakes

All of the mods that we have discussed so far help an E46 go faster, but being able to stop effectively is obviously just as crucial. OEM E46 brake assemblies, including the factory rotors and calipers, can handle track duty if you upgrade other surrounding elements like the brake pads, lines, and fluid. However, upgraded rotors are a good idea if you opt to use upgraded pads (which you should) to help with overall performance.

The most important brake system upgrade that you’ll have to do at a minimum is swapping out the factory pads for performance ones. Race pads have the benefit of absorbing more heat generated while braking and take longer to reach their fade point. That is crucial on the track, where brake fade is the primary killer of lap times if you plan on doing more than a couple of laps in succession. 

Only one-piece steel brake rotors are allowed in Spec E46, meaning that you can’t deviate too far away from a stock setup. However, to improve cooling, valance openings in the front fender to allow air ducts to the front brakes are allowed if your brakes are getting too hot on track. 

Smaller upgrades like upgraded braided metal brake lines and upgraded brake fluid can also make a big difference on the track. Stainless steel brake lines provide a quicker, firmer, more consistent pedal response by maintaining consistent brake pressure. Additionally, stainless steel lines provide precision brake modulation, especially during threshold braking. Switching to a brake fluid with a higher boiling point is another relatively inexpensive way to improve braking performance. The higher boiling point of upgraded fluid will prevent brake fade and other issues caused by overheating brakes.

Weight Savings

By modern standards, the E46 chassis is pretty light, weighing in at around 3,200 lbs. Considering that the G20 3-Series weighs around 4,000 lbs, the E46 is a featherweight. However, it did gain around 150 lbs from the E36 which you can definitely feel. The good news is that there is plenty of excess weight that can be shed.

Weight savings can be as extreme or moderate as you want, with some enthusiasts drilling down to the gram while others want to retain a relatively stock-ish interior while still shedding a few pounds. Regardless of your plans, I’ll break down what you can remove and how much weight you can shave down as a result. 

The biggest ticket weight reduction items include removing the passenger and rear seats (76 lbs), spare tire and jack (32 lbs), carpeting (40 lbs), headliner and sunroof (with delete kit 40 lbs), A/C unit (40 lbs) and plastic trim/pillars (15 lbs). There is more that can be removed, of course, but those are the major items that have the least impact on drivability. 

Outside of the easily removable items, there are quite a few items that you can replace with lightweight versions. For example, switching to a carbon fiber hood and trunk lid can save you nearly 100 lbs. A lightweight battery can save 25 lbs. Aftermarket performance parts tens to be a lot lighter than their OEM counterparts too, so you’ll save even more weight with an exhaust system and lightweight aftermarket wheels. 

If you want to learn more about potential weight savings, there’s a great forum post with a breakdown of pretty much every item that you can remove and how much it saves

Safety

Go-fast bits are obviously a big part of building a good E46 track car, and while safety mods aren’t the most fun, they are vitally important. Most racing series have their own requirements as far as safety requirements are concerned, and almost every racing series is extremely rigid and strict when it comes to meeting those standards. 

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The most common safety requirements for most organized E46 racing series include a six-point roll cage (with additional rules and regulations surrounding how that cage was installed and assembled), some kind of fire suppression system, tow eyes for quick retrieval should anything go wrong on track, code-approved lug nuts, firmly secured oil lines, up-to-code fluids, a kill switch, and an appropriate helmet and race suit. Once again, safety requirements can vary significantly based on the racing series, so it is important to thoroughly look over the requirements of the series.

In most cases, if you fail even one aspect of the safety inspection, you aren’t allowed to compete in the day’s event, so it is important to have everything dialed in before showing up at the track.

Have Fun and Enjoy Your E46 Track Car 

While I did my best to outline most of the basics required to cobble together a pretty capable E46 track car, there is no perfect recipe. There are hundreds if not thousands of E46 track car threads on all of the major E46 forums and no two of them are the same. Building a track car always boils down to personal preference and your driving style, but the good thing about the E46 chassis is that it can accommodate any personalized build under the sun.

If you really are considering going deep on this adventure, I highly recommend reading about other enthusiasts’ E46 track day build experience. There is so much information out there about any potential modification, powertrain swap, suspension setup, tire choice, and everything in between. Since there are so many factors involved in the process, it is a great idea to see where other E46 owners have experienced issues, wished they would have gone another route, or found a better way to do things. Knowing those things beforehand will save you a lot of time and money in the long run. 

Regardless of your individual goals, there is little chance that a purpose-built E46 track car will do anything besides put a massive smile on your face. It is a long and expensive journey getting there, but the results almost always pay off a hundred-fold. 

If you enjoyed this article and are curious about other potential BMW track car options, I wrote a very similar article to this one on E36 track day cars. Take a look at that article and decide for yourself which is better for you. 

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