The following is a brief history of the E21 chassis. Thanks to the E21 High Performance Group for allowing the use of some of this information.

The E21 was first introduced in July of 1975 as the successor to the legendary 2002. (One version of the '02, the 1502, was to live for a while during the production of the E21, and was offered as a low-cost fuel-miser during the fuel-crisis.) The first models of the E21 were the 316, 318, 320, and 320i, (1573, 1766, and 1990 cc's, respectively). The "i" designated the use of Bosch K-Jetronic fuel injection (also known as CIS, for Continuous Injection System) in place of the single Solex carburetor. The USA only officially received the 320i, due to the ability of the fuel injection to comply to the tightening emissions laws.

The first 3er used a front suspension consisting of MacPherson struts that were angled rearward to allow better anti-dive characteristics. The front anti-sway bar also served as a front-link for the lower control arms. Steering was via rack-and-pinion. Brakes were vented discs with fixed 2-piston calipers in front, and drums in the back. The rear suspension had the venerable semi-trailing arms, but were suspended with spring/struts assemblies.

DIN horsepower for the European models were 90bhp for the 316, 98bhp for the 318, 109bhp for the 320, and 129bhp for the 320i. The US-tuned 320i produced 110bhp. This was the 3 series lineup until September of 1977 (1978 model year), when a completely new engine was introduced by BMW.

The new engine was originally designated the M60, later redesignated M20. It was to fit directly between the 2.0 liter inline-four and the big sixes used in the larger cars which started at 2.8 liters. Several designs were considered, including a "big" inline four, a V-6, and an inline six. The inline "baby six" won because of its inherent smoothness. Comparative weights in pounds were (block/as installed): M60, 105/375-388; inline four, 98/309-331; big six, 130/452-485.

The M60 utilized an iron block and aluminum head, similar to the rest of BMW's engines. It's most distinctive (and controversial) difference was the use of a timing belt, as opposed to a timing chain. Also, the forged crankshaft of the other engines was replaced by a cast iron one. The 2.0 liter models had a bore/stroke of 80mm/66mm, while the 2.3 liter had 80mm/76.8mm. The pistons were flat-topped. Fuel was fed to the 2 liter via a single Solex 4-barrel carburetor. The 2.3 liter was fed with K-Jetronic injection, similar to that in the 320i, but feeding six cylinders instead of four.

The introduction of the engine into the E21 chassis brought a few changes. The 320/6 replaced the 320 and the 320i in all markets but the USA. Because of the increased length of the six cylinder, there was no engine-driven fan. Instead, the radiator was force cooled by an electric fan in front of the radiator. The transmission bellhousing was shaped differently than that of the four cylinder E21s and so required a different transmission. Both four speed and five speed transmissions were offered with the M60, but unlike the four cylinder cars, no automatic was available at first. The 323i also added rear non-vented disc brakes with single piston calipers, thicker and stiffer front struts, dual-exhaust, a different tachometer and speedometer, and a taller-geared final drive ratio.

Other changes for the 1978 models included the replacement of the vented disc brakes with conventional non-vented ones on all but the six-cylinders. Early in the production run, the rear sway bar was deleted from the US spec 320i. It was still available as an option by itself, and was included in the "Sport Package", or 320iS. The 320iS also had Recaro seats, three-spoke steering wheel, limited slip differential, BBS basket-weave 13x5.5 rims, front air dam (some years), and the "320i" designation was removed from the trunklid. All of these items were available on the European models as stand-alone options.

For the 1980 model year (late 1979 production), BMW made even more changes to the E21 line. All models received slightly different panels in the radiator core-support area. This was to allow the radiator to mount further forward in the six cylinder models, and thereby allowing the use of an engine driven fan. The four cylinder models also had this change in panel, but had a support spot-welded in to allow the radiator to mount as it did before. The interior was updated, especially in the climate-controls. Also in that model year, cars for all markets received mirrors which were mounted at the leading edge of the front window (earlier models had a chrome mirror mounted on the side of the door).

For the United States, this also marked the end of the 2 liter four-cylinder. For the USA's tighter emissions standards, BMW reduced the displacement of the engine to 1.8 liters, and used a newer K-Jetronic Lambda fuel injection. The Lambda saw the addition of an oxygen sensor, and a catalytic converter. The additional smog equipment and smaller motor dropped the power to 101hp at 5800rpm, 112 lbft of torque at 3750 rpm.

There were some changes for the European models for 1980 also. The 316 got the 1766cc engine with a 2 barrel Pierburg carb and 90hp. The 318 gained an 'i' with a K-Jetronic fuel injection and became the 318i with 105hp (previous version of 318 was 2 barrel Solex carb'ed with 98hp).

The 315 was introduced in 1981 and available until 1985 as a low cost BMW. Depending on the model year, they may not have had chrome covers to hide the bolts of the bumpers, tool case on the trunk cover, electric mirrors, the gasket for rear side windows may not have been surrounded by a chrome ledge, etc. It had a 1573cc four cylinder with a single barrel Pierburg carb and a modified exhaust manifold. The horsepower was 70-75hp depending on local regulations.

In the US, the E21 320i was sold through mid-1983 until the E30 318i was introduced as a 1984 model. In Europe, all E21 models (except the 315) were replaced by similar E30 models for the 1983 model year.