As far as the debate about them using an N55 in the M3, you have to remember the 1M was made on a tight time constraint. This car will debut in 2012/13, which gives BMW a ton of time to really develop an engine.
We will see an S engine.
Also remember BMW doesn't need to play horsepower wars. Regardless of the HP, the car will be faster around the ring than the competition. Just like we saw with the 1M.
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