Troubleshooting Engine BMW E36/5 1994-2000

Troubleshooting Engine BMW E36/5 1994-2000It’s now 20 years since the final first generation E36 Compact came down the production lines but it remains one of BMW’s most successful gambles – it could so easily have flopped in the market place but in essence it took the place of the old two-door four-cylinder E30, opening up the special BMW experience to both new and previous BMW buyers.

Developed in conjunction with the Z3 sports car, the Compact combined the E36 saloon front section, up to and including the bulkhead, with an all-new rear section whose floorpan was designed to accept a modified version of the previous E30 semi-trailing arm rear suspension. The wheelbase was the same as the standard E36.

Launched in autumn1994, the Compact range comprised two models, the 316i with the new 100hp 1600cc M43 engine that had just been launched in the E36 316i saloon (an 1800 was available in the saloon and new Touring), and the existing 140hp 1.8-litre M42 twin-cam 16-valve unit from the 318iS Coupe. A 1.7 -litre 318tds turbo diesel with 90hp was to join the range shortly after for 1995.

Immediately on launch, Compact sales took off everywhere and because only the Munich plant built it, production could never keep up with demand – the satellite 3 Series plant at Regensburg built some saloons as well as the Coupé, Convertible and Touring models. However, this situation resulted in extremely high residual values to the extent that over three-years, a well-specced £16,000 318Ti with a couple of options became cheaper overall to own than a more expensive Vauxhall Astra or (shudder) Ford Escort.

Changes to the Compact were few over six years. In 1995 the M42 engine was replaced by the similar looking 1.9-litre M44 from the Z3 and in autumn 1996 the whole E36 range was given a very slight facelift with slimmer side repeaters and fatter grille kidney chrome surrounds. In late 1998 the M43 1.6 engine in the 316i was replaced by the M42TU 1.9-litre 8-valve SOHC engine from the new E46 316i, and the E36/5 Compact was discontinued in 2000 with the last cars built in August.

There were various option packs for the Compact starting in 1994 with, SE Sport and Lux – the former wasn’t the later version with M3-style bumpers but had sport suspension and seats, colour coded bumpers, 15-inch alloys, electric sunroof and front fog lights. The SE featured the sunroof, extra interior lights, a microfilter, PDC, remote locking and an auto dimming mirror, whilst the Lux featured 15-inch alloys, electric sunroof, headlight wash and foglight, extra interior lights, micro filmer, an on board computer, PDC, rear headrests and auto dip mirror. The full Sport version arrived for 1999 and was the existing Sport with M3-style bumpers and side mouldings, 16-inch alloys, black headlining, clear indicators as well as unique colours like Avus Blue and Dakar Yellow

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These came in two forms, the 1600cc up to late-1998 and then the 1.9 TU. Both are great engines but they have some issues. The most common is head gasket failure, it’s strange as the previous M40 with the same block almost never did this. Repair is simple enough with new head bolts, the essential head skim and gaskets. These units also have plastic coolant elbows on the back of the head, side of the block and the front of the head and they will need replacing by now as they go brittle and crack. The 1.9 units run hotter for emissions and are prone to oil leaks as the rubber gaskets get cooked – cam cover and oil filter housing seals are the worst but easy enough to change. Timing chains are excellent.


These are really getting on now with the last one made 25-years ago. But a well-maintained one will run indefinitely as long as it has clean oil and coolant. The duplex timing chain will last 25-years or more, although an M44 chain tensioner – a 20 minute job – will quieten one down as they can be rattly at idle. Moisture can build up in the spark plug wells resulting in a misfire, easily fixed. The heater outlet pipe on the back of the head can corrode resulting in a drip – a difficult fix as the pipe is pressed into the head but doable with the inlet manifold removed. Exhaust manifolds are tubular and can blow from where a pipe is welded into the flange, removal is fiddly but they can be seam welded to cure this.


Regarded by many as the high-point of BMW four-cylinder engines, this was the last of the bulletproof fours before the more efficient (but decidedly less robust) N42 arrived in 2001. It’s basically a revised, larger bore M42 with changes; roller rockers, plastic mapped thermostat and housing, a hotwire MAF (replacing the old air flow metre) and new type plastic cam and crank sensors. Capable of withstanding appalling neglect, the M44 does suffer the odd head gasket failure, once cooked the head can crack. If maintained correctly the M44 is a 200,000-mile engine – it will just run indefinitely. The M44 replaced the M42’s forged steel crank with a grey cast iron one but it’s no worse for that. A superb engine.


Ah, the 318tds, known jokingly as the ‘Tedious’. This was a 2.5 M51 tds (525tds E34/E39) with two rear pots chopped off and it was never very good. BMW tried to counter the VAG 1.9 TDI but rather than designing a diesel from scratch (or even making a 1.8 or 1.9) they did it on the cheap and whilst the 1665cc unit developed the same on paper 90hp, the lack of capacity showed on the road with fairly dismal performance and “so so” economy. Still, they are super tough with regular oil changes, a mild remap will release another 10hp and much needed mid-range torque to counter the very flat feel these have. Problems are few as they are very simple – no MAF for example, or swirl flaps and a very simple EGR system. It is old age and wear and tear. Specific issues are a tired in-tank pump (poor cold starting) and a leak from the main injection pump. Wiring the in-tank lift pump directly to the ignition often cures bad cold starting as it’s activated the second the ignition is switched on.

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All Compacts use the Getrag 250G five-speed which is both very tough and long lasting, and very cheap and easy to replace. The four-speed GM (General Motors) automatic is reliable but not very good in this application – it never seems to be in the right gear but it’s ok as an around town unit. The occasional oil change is a good idea, on manuals, replacing the gearlinkage bushes is a cheap but annoying fiddly job if the gear change is really sloppy.
If you wanted to fit a Z3 short-shift kit you’ll probably find your Compact has the big balance weight on the front of the propshaft around the rubber giubo coupling – you can remove it but it’s a ramp job really, exhaust and prop off etc. Auto gearbox problems can be caused by a faulty ABS or engine sensor.


The Compact diff is nice and long lasting although they can get whiney in old age and with high mileage. They are plentiful used and easy to replace. Drives hafts are much the same. Suspension is tough, the common weak points are knackered front dampers – if they look like they are from the Titanic, they’re scrap, leaking or not. Knackered front wishbones are best replaced by complete new ones – forget about replacing balljoints.
The rear axle beam bushes are a common casualty and are a garage job unless you have the proper tool to remove and replace them. To replace one side at a time, remove the steady plate, slacken the centre pin and with the damper disconnected and spring removed, jack the trailing arm up to full compression before pulling the axle bean down and removing the centre pin – no need to disconnect the brake pipes.


The Compact never seemed as prone to rot as the saloons and perhaps the Munich plant paint prices were better. But they’re all pretty ancient now and the common rot spots are the front wings, rear arches and sills. Check the rear inner sill either side of the rear axle beam as they can rot in here. Cars without plastic sill covers rust less. Compact headlights are unique to this car and other E36 lights do not fit – well, they will bolt in but the connectors are all different. The four circular jacking pads for trolley jack use must be present as without therm, water will get in and sit the sills around. Whilst it’s rare on other E36s, the Compact seems to rot around the front anti-roll bar mounts spot welded to the chassis rail. BMW sell new ones tough and it’s a simple welding job to replace them.

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The Compact interior was never as nice to look at as the regular E36 version but it seems to last well. However, the door trims are pretty rubbish and most need removing, the clips replacing and the plastic mounting pieces refitted with Araldite Rapid – nothing else is as effective so take heed. Knackered driver’s seats can be restored using clip-in foam and covers from a good passenger seat. Window regulators are as marginal as any other E36 and they are the same as the saloon – they have a bigger glass to power up and down. Only use genuine BMW regulators if buying new. Regular shots of WD40 and Vaseline in the vertical felt channels kept them good and prevents the gas from becoming stiff, resulting in the regulators from popping out of the glass sliders. Not ideal.


The Compact can be improved. A Z3 steering rack makes them much sharper and a good ones cost £100. You can use a purple tag E46 rack but they’re not as good. Decent dampers and Sport antiroll bars help, and if replacing the front wishbones use E30 ones and fit E30 M3 eccentric rear bushes to increase castor angle and improving steering feel still further. A remap won’t give big power gains but will sharpen up what’s already there, while 16-inch wheels give better handling than 15s. Compacts came with skinny non-vented brake discs, vented discs and callipers from a six-pot car, or a 318iS, will improve, and give consistent braking feel, under hard use.


The ABS system is reliable enough and parts are cheap. On cars with the ASC system, the ABS module (896/897 unit) under the battery tray can fail but they are common and inexpensive, and they’re not bad to change if you are ultra careful refitting the brake pipe unions. Radiators seem to last forever but they are cheap to buy and 20 minutes to replace. The rear washer can block and you’ll need to poke the central wiper motor shaft through with wire and compressed air after motor removal and probably fit a new washer jet

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