The BMW E36 is the third generation of the 3 Series compact executive cars produced by BMW. It was introduced in late 1990 (as a 1991 model) for Europe and in late 1991 (as a 1992 model) for US and Canada. It was the successor to the E30 3 Series and was eventually replaced by the E46 3 Series in 1998, though E36 coupes were still produced for the 1999 model year. The E36 experienced enormous success in the market. It laid strong foundations for the success that the BMW E46 experienced in subsequent years.
Also known as the "dolphin shape", the E36 was sold from 1991 through 1999. All E36 saloons, coupes, and station wagons employed the "Z-axle" multilink suspension in the rear which had been proven in the Z1. The hatchback body style, known as the E36/5 or BMW Compact, was identical to the regular E36 from front bumper to A-pillar. In order to save space due to its truncated rear end, the Compact used a rear semi-trailing arm suspension based on the older E30 (also found in the Z3 and M Coupe), instead of the Z-Axle Multilink employed in all other E36's.
In the United States, the four-door E36 were on sale by fall 1991, while the E30 coupes were retained until well into 1992 when they were replaced by E36 coupes. The E36 convertible was delayed until 1994.
The hatchback body style, known as the BMW Compact, was introduced in 1995 starting with the 318ti, being very popular in Europe but largely unsuccessful in North America. The "Touring" station wagon was sold in Europe from 1995, but was not available in the United States.
DOHC engines were used across the range (except in entry level models, see table below), with VANOS variable valve timing introduced in 1993. The 2.5 L M50B25 used in the 325i models was replaced in 1996 with the 2.8 L M52B28, creating the 328 line. Another 2.5 L I6 engine, the M52B25, was reintroduced for 1998 but badged as the 323i rather than 325i.
BMW made an entry level version of the E36 called the BMW Compact, a three-door hatchback. This platform is often referred to as the E36/5. In the United States/Canada market the car was sold as the 318ti and was equipped with a 1.8L I4, 139 bhp (104 kW; 141 PS) M42B18 engine and was priced at USD23,000 in 1995. In 1996 the 1.8 liter engine was replaced with 1.9L M44B19 putting out 142 bhp (106 kW; 144 PS) and 133 ft·lbf (180 N·m) of torque. Ostensibly due to slow US sales of the E36/5 Compact, the E46 Compact was not sold in the United States.
A modified version of the E36 platform designated as E36/7 was used for the BMW Z3 roadster in 1996-2002. The modification for the BMW Z3 Coupe was designated as E36/8.Even though the BMW factory was producing its own E36 convertibles, the Baur "Top Cabriolet" conversion was still available, possibly out of respect for the long association of the two firms.