1999 BMW Z3

The Z3 was developed from the E36 platform of the 3 Series. The resulting platform is sometimes referred to as the E36/ 7(roadster) or E36/ 8(coupé). The rear semi-trailing arm suspension from the E30 was used rather than the more sophisticated multilink suspension from the E36. At first, only the 1.9L M44B19 straight-4 engine was offered, but its 138hp (103kW) was not up to buyers' expectations. Interior appointments too were not up to the standard of other BMW models, and the plastic rear window looked poor compared to the glass unit found on the much less expensive 1999 Mazda MX5.

In the North American market, the inline-4 engine was complemented by a larger straight-6 engine in 1997: the 2.8L M52B28. This engine, similar to the BMW M52 in the 328i except with an all aluminum block and head, was especially desirable with its 189hp (141kW). The M Roadster (see below) appeared in 1998 with a 3.2L S52B32 (North America) or more powerful S50B32 (International) I6, just as the four was retired. In 1999, the 1.9 L 4-cylinder engine was replaced with a 2.5L straight-6 M52TUB25, producing 170hp (130kW). Due to marketing, BMW wanted to differentiate the 2.8L engine from the 2.5L engine, so it was badged it 2.3 just like the 3-Series 323i, which also has a 2.5L engine.