Originally Posted by footie
The S5 I had was the exact same, peak power was at 7000rpm but redline was 7500rpm. I found no benefit shifting at redline though because of the shortness of 1st gear it was always harder to shift at the 7000rpm but all other gears definitely felt better to shift below the redline.
The RS4 and R8 have peak torque from 3000~5600rpm so shifting at 7800rpm puts you back into that torque curve. There is no doubt that the M3 is designed to redline in every gear to get the best from it but the others including the C63 work best working between the torque band and peak power.
I guess you have to factor in more drivetrain loss at higher RPM, which could result in what you are describing...