This S52 M3-Swapped BMW 318ti is the Hot Hatch They Never Made 

Double the power, double the fun.

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In the late 1990s, both BMW and Mercedes-Benz tried their luck at bringing a few of their more economical offerings over to our shores from the distant land of Europe. Both failed miserably—the BMW 318ti in particular was hobbled by the automaker deciding to only offer it with a 138-horsepower inline-four engine. Imagine what could have been with just a little more power.

Thankfully, you don't have to anymore. Instead, just pull out your checkbook and buy this 1997 BMW 318ti with a 240-horsepower S52 six-cylinder engine out of an E36 M3 for sale on Bring a Trailer. The suddenly-hot hatch also features a upgraded gearbox, limited-slip differential, and brand new suspension to help it cope with at least a 75% increase in power. It's these kinds of ideas that give us hope for the future of mankind.

So, about that engine. The previous owner got ahold of a gently used S52 inline-six out of a BMW E36 M3 and added a M50 OBD I intake manifold and custom ECU software. The engine was also refreshed with new gaskets, seals, and filters throughout, along with new spark plugs and a new aluminum radiator. Power travels through a single-mass flywheel out of an M5 and a Getrag 5-speed manual out of a 2002 BMW 325ci.

With a strengthened chassis, Bilstein shocks, and B&G lowering springs, the 318ti should have no problem keeping it together in the corners. The decision to relocate the battery to the trunk helps balance things even further, and an M3-sourced 3.23 limited-slip differential and 17-inch alloys reinforce the feeling that we're looking at something that came straight from the hallowed halls of M GmbH.

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Of course, they never made a BMW M3 Compact—except once. The M Division built a single example in 1996 to celebrate the 50th birthday of auto, motor, und sport, a German car magazine, and it featured literally everything from the regular E36 M3 (not to mention the higher-performance Euro market S50 engine) plus quad exhausts, alcantara trimmings, and Recaros. Unfortunately, it remains tucked away in the M Division's secret garage with all the other one-offs.

So basically, this is the next best thing. Unless you live in California, that is, because there's currently a debate raging in the comments on Bring a Trailer about whether or not this car could pass the state's notorious smog inspections. For the rest of you, though, bidding currently sits at just $4,555—not bad for a stubby little M3.