The E36 increased the distance between the BMW 3-Series and the 2002 that inspired it by moving the nameplate up a notch on the market. Bigger, faster and more opulent than its predecessor, the E36 alienated a small group of purists that longed for a simple, nimble and relatively affordable rear-wheel drive machine.
To cater to that crowd, BMW created the 3-Series Compact in 1993 by truncating the E36’s rear end and adding a hatchback to it. Many enthusiasts saw the car as a spiritual heir to the 2002 Touring of the early 1970s, but it was often criticized for its awkward look.
On paper, the idea was very similar to the Touring: From the front bumper to the A-pillar, the Compact and the regular E36 were identical. Beyond that, the car had a considerably reduced wheelbase, a short rear overhang and a taller trunk lid that some of the harsher critics compared to a European-spec three-door Ford Escort hatchback.
The Compact made its debut in the United States about a year after being launched in Europe. The only model offered was the 318ti, which was initially powered by a 1.8-liter and later an upgraded 1.9-liter unit. In Europe, buyers could choose between a wider offering of engines that included an entry-level 1.6-liter four-banger (316i / 316ti), a 2.5-liter straight-six (323ti) and even a 1.7-liter 90-horsepower turbodiesel mill (318tds)
BMW never mass-produced a M3 Compact because the model slotted at the bottom of the 3-Series lineup. However, it launched several sport-oriented limited-edition variants in both Europe and North America. One of the better known ones is the 318ti MSport, which packed extras such as Recaro bucket seats, a specific-exhaust and a full body kit.
Reasonably popular in Europe but less so in the United States, the Compact was phased out in 2001 and replaced by a very similar model based on the the E46 3-Series. The new model did not last long and it was phased out with the arrival of the more conventional 1-Series hatchback in 2004.
Will the 3-Series Compact remain the black sheep of the E36 family forever, or will BMW enthusiasts eventually warm up to it and treat it as the descendant of the 2002 Touring?