A car that many BMW enthusiasts love to hate, the 3 Series Compact was the brand’s first hatchback since the days of the 2002 Touring. It was only sold for about a decade (1994-2004) across two generations before being indirectly replaced by the original 1 Series (E87). The idea behind it was to sell a cheaper entry-level car to lure in younger buyers who wouldn’t necessarily care about the cost-cutting measures.

The car’s styling didn’t help its cause, and it’s especially true in the case of the E46/5 featured here. However, this isn’t just any second-generation 3 Series Compact since it hides a real gem underneath the hood. While the most potent engine installed by BMW was the M54 with 189 hp, this one has the mighty S54 with nearly double the output.

The inline-six engine made 355 hp back in the day but has since been remapped by Alpha-N Performance to extract 370 hp. As the saying goes, with great power comes great responsibility, which is why the owner fitted a set of upgraded M Performance brakes.

The 3.2-liter unit sits inside a smaller and lighter E46 that does away with the rear seats. The whole cabin has been stripped out to shave off fat while the front seats made way for a pair of body-hugging Recaro seats with a Sparco racing harness.

Nürburgring resident Misha Charoudin had the opportunity to take the CSL-powered E46/5 Compact for a spin around the challenging German track, which was rather busy that day. He overtook one car after another but had to slow down after the engine overheated. After the temperatures were normal again, the hot hatch was pushed hard, hitting speeds of more than 200 km/h (124 mph).

Misha argues that with better cooling and brakes, the car would be substantially faster. It won’t set any Nürburgring records but it’s a lot of bang for the buck, especially if you prefer more analog cars with naturally aspirated engines.

Source: Misha Charoudin / YouTube