The e46 M3 is actually one of the most reliable cars BMW has built in the last 10 years . . . unless you have the SMG option on your transmission of course. The first generation SMG (or Sequential Manual Gearbox) transmissions have not held up well over the long run and are starting to empty the pockets of their loyal owners. So if you are in the market for an e46 M3, stay clear of the SMG. If you currently have an SMG M3, this may be what you’re in for if you haven’t had the pleasure already.
When the e46 M3 came to market with the SMG option, it was widely assumed/stated that if there were any issues with the transmission that it would warrant replacement and that they were not to be serviced. Nor was any service attempts to be made. However, us being technicians/mechanics, it is in our blood to just fix things. Sometimes we can go to great lengths to do so.
We belong to a large group of Independent BMW Service shops that regularly email each other when strange problems arise; to date I have about 60 email threads focused solely on the SMG issues and the failed attempts to fix them. The replacement parts are expensive, none of them can be returned, and attempts to fix a failing SMG usually wind up with the shop losing it’s ass and the customer about to sue. It’s quite depressing to read the trials and tribulations inflicted by our friend the SMG.
Prehaps the most common problem with the SMG will be that of the skip shift. You’ll be driving around town, cruising along, listening to some tunes and minding your own business; everything is A-OK in your M3 world. Then some dipshit with the latest Mitsubishi with glowing paint and the ugliest wheels you’ve ever seen wants to mess around. His blasting ‘music’ sounds like something the military would use to get terrorists out of a lock down and the bass is so loud it rattles his car on every hit and almost knocks off his flat brimmed Hurley hat. You say ‘time to teach this punk a lesson.’ Light turns green and you start to see his plastic horsepower machine in your rear-view until it’s time for 3rd gear to kick in. All of a sudden you slow down, he flys by, and you see a flashing ‘4’ in front of you and a Mitsubishi off in the distance. FAIL.
If you experienced this yesterday, I suggest you take the day off from work, detail your car and get ready to trade it in for something else — you deserve a new car anyway. Of the 60 email threads, this one has proven to be the most daunting and haunting. Here’s an excerpt of one email:
We also had some issues couple of years back with one that had similar faults and symptoms, We put in new clutch, new control pump, etc. Still no go, new shift housing, no go. New gear box, car went.
I haven’t spoken to this shop personally, but I would almost have to assume that this was a personal car of the owner. The failed attempts to fix the SMG issues before ultimately replacing the gearbox would probably total in the $3k range. With the gearbox itself costing over $7k. So now we are up to $10k in attempted repairs until we have found a fix. Ouch. I’ve got countless documented cases of this symptom/fault with the SMG and they have all resulted in the replacement of the gearbox, with the shop eating a large amount of the bill and the customer being irate about their bill. Ugly, ugly, SMG.
With all that said, there are a number of symptoms that have been able to be fixed. Unfortunately none of the parts to do so are cheap, and in many cases a recommended repair will not guarantee success. So if you currently own an SMG car, let this sink in, digest it, and then decide how much you love that car as it might cost you big time in the future. If you are considering the purchase of an SMG car, you might want to think twice or make sure you get a bullet-proof warranty that specifically states that the SMG transmission and associated parts are covered. Unfortunately I’ll continue to have the great pleasure to tell folks “I can do this $1200 repair, but in no way can I guarantee it will work, and you’ll still have to pay the bill as I cannot return the part” Kinda like russian roulette for cars. Pretty bleak.
Take Care and happy paddle shifting.
Chris Keefer
5836 Autoport Mall
San Diego CA 92121
858-455-5836
BMW Service Blog 
sorta like steptronic appears to be high German for “won’t go in reverse”.
What do you think about the dual clutch DSG style trannies that are coming out now? Any chance that they’ll turn out to be reliable?
Well Pat,
Only Time will tell. All of this stuff seems great at first until problems start to surface. The 335i was touted as a great car until the fuel pump problems started to surface. Stay Tuned I guess??
and with the announcement of the new 2 liter DI turbo as a possible new base engine (http://www.autoblog.com/2011/01/11/report-bmw-z4-to-get-four-cylinder-turbo-as-base-engine/), I’m going to have to lease my next car so I can get rid of it before it blows up on me 😉 Or maybe the HP fuel pump thing will be sorted by then.
Or buy a new one sooner, while I can still get an NA 6 and a manual 🙂 Or keep the current car alive even longer (it’ll be in soon for some TLC)
Thanks Chris!
Glad I told my buddy to lease his M5 instead of buying it or a used one. Turns out it was a good choice it sounds like. I’ve been lucky with my 335i…no fuel pump yet, but it is going out (long cranks)…gulp.
Hi Chris,
Crap, wish I had found this before I bought my 2006 BMW M3 a year ago. It has low miles now a year later with only 25,000 miles but alas is out of warranty and this worries me about having SMG in my car. So far its ok. But should I buy an extended BMW warranty or sell the car and buy something more reliable like a Porsche or Lexus? I did run into a fellow M3 owner who spent an obscene amount of money like almost 8 grand to replace his SMG! Geez, seems like even Ferrari and Lamborghini are more reliable and cheaper to fix than an SMG based M3.
Thanks
Ben
I realize that you left this message months ago and are therefore unlikely to read my reply, but GET OUT OF THE SMG!!!!! I was given the runaround by a certified BMW dealer who couldn’t properly diagnose it’s issues almost exactly a year ago, and ended up paying ~$7K to replace my transmission piece by piece. Now, a year later, I’m looking at replacing yet another piece of the transmission, only this time for a cool $1700 (what a steal! – oh, except for the fact that they can’t guarantee that this will fix it). Sell it while it’s working well (which, given that this was written 10 months ago, it probably isn’t), and buy something more reliable.
Another Ben
Google “IMS Failure” before you buy a reliable porsche 😉