Some would argue that BMW is not the automaker it once was – that its hunt for luxury market share has clouded its original vision, to build the “ultimate driving machine.” Swollen with model lines to compete with rivals like Mercedes-Benz and Audi and to pioneer new segments, BMW doesn’t seem to have the time or energy to uphold its performance-derived mantra — at least not for every product.

Thankfully, such concerns are not shared with M, BMW’s in-house tuning department. The latest full-blooded M cars like the M2 and M5 continue to deliver the responsiveness and character enthusiasts expect of the brand. And now there’s more M-engineered goodness to be had. “M Performance” BMW models borrow parts from their full-M counterparts to enhance athleticism. Though not to the same degree as blank-slate M vehicles, M Performance offerings are tuned to get the most out of their upgrades.

The third generation X3, introduced late last year, is not among BMW’s worst offenders. With a potent 2.0-liter turbocharged engine and stellar handling, the new X3 is one of the best compact luxury SUVs on sale. Sounds like an ideal platform for an M Performance model, right? BMW thought so, too. The 2018 X3 M40i ($55,495) packs a generous helping of horsepower to go with improved braking and handling. Facing off against rivals like the Mercedes-AMG GLC43 ($57,245) and Audi SQ5 ($55,275), BMW needs some classic moves to come out on top.

Save for a few cutting-edge products like the i3 and i8, BMW vehicle styling is traditionally understated, even for performance models. The X3 M40i looks much the same as the evolutionary third-gen X3, plus a few unique touches. BMW’s new, larger kidney grille is finished in a bronze trim to match bronze mirror caps. The M40i’s lower fascia mimics other M cars, with a gaping center inlet and re-sculpted flanks with honeycomb inserts. Standard 19-inch double-spoke wheels wrapped in performance tires are swapped for 20-inch designs on our test model (21-inchers are also available). Blue painted brake calipers are standard with any paint color. A unique rear bumper features a blacked out diffuser and dark painted dual exhaust ports. M Performance styling enhances the X3’s curb appeal appreciably — without breaking its refined code.

Interior Comfort and Convenience

A good luxury vehicle cabin seamlessly blends technology and refinement. BMW’s X3 M40i follows this principle perfectly, integrating sophisticated convenience features with traditional comforts. Dark soft touch materials on the dashboard contrast brushed metal and geometric design trim throughout the interior. Supple cognac leather seats with eye-catching designs provide both support and comfort for long trips. Palm branch styling details appear on the upper air vents, dome lights, puddle lamps, and elsewhere for added intrigue.

Superb fit and finish accompanies high-tech amenities like a 10.3-inch touchscreen infotainment (an upgrade over the standard 6.5-inch unit), 12.3-inch digital driver display, color head-up display, and a wireless charging dock. BMW’s iDrive system grows even more intuitive, responsive, and advanced with each new iteration. We love the display’s tiled arrangement for quick access to key functions like vehicle settings, navigation, weather, traffic, and media, but can’t understand charging $300 for Apple CarPlay or neglecting Android Auto entirely.

The iDrive controller with an integrated touchpad, physical controls on the center stack, and steering wheel buttons provide excellent redundancies to suit driver preferences. Audi’s MMI system and Mercedes-Benz’s COMAND module have caught up to iDrive’s sophistication, but they can’t match its workflow.

With a 2.2-inch longer wheelbase than the previous X3, the latest SUV has excellent interior volume for four adults (five when needed). Head and legroom for all riders is generous, and a panoramic sunroof provides subjective atmosphere. Furthermore, BMW’s smart storage solutions, including front door drink cubbies to accommodate 64-oz. bottles, keep loose items from floating around the cabin. Trunk space is also among the best in class, with 29 cubic feet available behind the 40/20/40 split folding second row, and 63 cu. ft. total with seats folded. By comparison, Audi’s SQ5 offers 27 cu. ft. behind the second row, and Mercedes-AMG’s GLC43 has just 19 cu. ft.

BMW X3 M40i


Apple CarPlay isn’t the only thing BMW puts in the options column. Driving aids that come standard on far more affordable cars are grouped into two expensive packages on the X3. Driving Assistance ($900) includes blind-spot monitoring and lane-departure warning, but full-speed adaptive cruise control, automatic emergency braking, lane keeping assist with side collision avoidance, front cross-traffic alert, traffic jam assist, and evasion assist are reserved for the Driving Assistance Plus package ($1,700).

Driving Dynamics

The X3 M40i’s $12K premium over the base xDrive30i must now be substantiated. A turbocharged 3.0-liter inline six-cylinder seems a good place to start. Sporting two more cylinders than the entry-level X3, the M40i produces 355 horsepower and 369 pound-feet of torque. A re-tuned eight-speed automatic transmission delivers power to all four wheels, facilitating a 0 to 60 mph sprint of just 4.4 seconds and a top speed of 155 mph (electronically limited). Both the fractionally less potent Audi SQ5 (354hp/369 lb-ft) and the more powerful Mercedes-AMG GLC43 (362hp/384 lb-ft) fall behind the X3 M40i in a race to 60 mph, with times of 5.1 and 4.5 seconds, respectively.

The Bimmer is just getting warmed up; agility and poise are the performance SUV’s real triumphs. An M Sport suspension, M Sport brakes, variable ratio steering system and (optional) adaptive dampers transform the X3’s driving dynamics. Ignoring its own 4,300-pounds of heft, the M40i tracks flat through corners like a proper sports car. Understeer is a common curse of all-wheel drive vehicles (especially those with high centers of gravity), but the M40i is more prone to kick out its tail in a tractable drift when over-aggressed. Steering feel isn’t a particular strength of the X3, and sport drive mode’s increased resistance doesn’t help the issue, but neither the GLC43 nor SQ5 can boast better feedback.

BMW X3 M40i


Optioning adaptive dampers introduces an “adaptive” mode to the standard comfort, sport, and eco pro selections. Here, the ECU monitors driving behavior to automatically soften or stiffen ride quality. Better still, simply notching the gear selector to sport while operating in comfort mode yields snappy throttle response and plush damping for an ideal blend of performance and ride quality. Even in its most aggressive configuration (and riding on low-profile tires), the M40i never punishes passengers with harsh vibration or stiffness. Cabin noise is also kept to a minimum for a true luxury cruising experience.

The EPA estimates 20 city, 27 highway, and 23 combined mpg for the X3 M40i, putting BMW’s compact contender ahead of both the SQ5 (21 combined) and GLC43 (20 combined) in terms of fuel efficiency.

The Verdict

The 2018 X3 M40i is a refreshing return to form for BMW, and a promising sign of vehicles to come. However the German automaker chooses to market its mid-grade M Performance vehicles, buyers will recognize their engaging driving dynamics as classic BMW engineering. We still believe a thinning of BMW’s burgeoning vehicle portfolio is in order, but we’ll take solace in standouts like the X3.

Matched against Mercedes-AMG’s GLC43 and Audi’s SQ5, the X3 M40i dominates the performance, efficiency, and comfort conversation. Styling is a toss up: some buyers will gravitate towards the AMG’s glitz or the Audi’s bold edges, but the X3’s subtlety has its own charm. With new generations of the X3’s closest rivals not due for some time, the compact luxury SUV segment is BMW’s to lose.