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BMW has made a mistakes not selling E46 M3 sedan. There were many theories floating on the web, some suggest E46 sedan platform doesn't look good with wide rear fender, some suggest E46 M3 sedan will directly impact the sales of M5, and it goes on and on. It's an interesting observation as you point out, only until next generation (Fxx) M3 model offer in "coupe only" for us to conclude BMW releases coupe/sedan every other generation. Rest assured all M models were the best in their era, nothing have been forgotten.
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