The M3's S54 engine has a redline of 8,000 rpm. As with most M engines, the S54 has 6 individual throttle bodies, in this case electronically operated (drive-by-wire throttle). The transmission options for the M3 were a 6-speed manual or the 6-speed "SMG-II automated manual transmission.

the E46 M3 introduced a high- revving 3.2-liter inline-6 engine, known as the S54, producing 333 horsepower. It combined performance with advanced technology like a 6-speed manual transmission or a 6-speed SMG automated manual transmission.