The third-generation BMW 5 Series was the car of its moment in Europe – and it almost didn’t matter what sat under the hood. Even the 520i’s 24-valve engine ran with German solidity and commendable eagerness. What really helped was the chassis – a taut sedan or compact touring – both leading the 1990s European premium market with generous luggage space, lively engines and a perfectly ergonomic driving position.
The E34 cost more than its rivals – even more than the Mercedes-Benz 124 – but it was worth it. Everyone who drove one felt the benefits of a solid, high-quality machine. And those who drove the M5? They could fly.
Rival Comparison
During the E34’s production run – 1988 to 1995 – the M philosophy was still being shaped. The first-generation E28 M5 had been the pioneer: a family sedan that could outrun a Porsche 911 Carrera or even a Ferrari 328, while still carrying kids to school. But the E28 carried the manners of the 1970s – flexible bodies, lots of body roll, like an overloaded bus in Mumbai. Charming, but not optimal for dynamics. The E34 M5 picked up what the E28 left and fixed the flaws.
The E34 M5 carried the DNA of a true all-rounder – even beyond the rare Touring version. It had to be very fast, but also maneuverable both in tight city streets and on twisting backroads. Comfort mattered too. Spacious trunk, electronic conveniences – the full package of a car that could do it all.
Direct rivals were scarce. The Lotus Omega and Mercedes-Benz 500E/E500 came closest. Both were faster and more expensive, but heavier and more compromised. The Mercedes cost a whopping 81,000 US dollars and was only available as a sedan, with an automatic transmission and carried a heavy throttle like a brick. The Lotus was rare and highly stolen, with twitchy handling and fragile turbocharged complexity, and a six-speed gearbox that only made sense at super speeds. Against these, the E34 M5 was the sweet spot.
BMW Motorsport’s S38
Engines built by BMW Motorsport carry a certain mystique – they bring racing magic to the street, with a sense of theater and occasion. The E34 M5’s S38B38 is one of those engines – a jewel that car lovers dream of. Its lineage traces back to the BMW M1 supercar. A later evolution went into the E28 M5 in North America, and by 1988, it became the main powerplant for the new E34. Compared to the E28’s 3.5-liter, the first E34’s 3.6 had a new forged crankshaft and camshafts with longer valve openings. Higher compression, wider and shorter pistons and equal-length exhaust manifolds brought more performance. In 1991 came the 3.8-liter – the ultimate version. It gained the newest Bosch Motronic ignition, higher 10.5:1 compression, a more efficient dual-mass flywheel, larger valves, throttle bodies and lighter pistons and rods.
Each car was hand-assembled at BMW M GmbH’s Garching facility. Bare painted shells were delivered from Dingolfing and technicians spent two weeks building each car by hand. Just 2,676 left-hand-drive European M5s with the 3.8-liter were ever made. It’s easy to imagine how invisible the new M5 was in 1988. To most, BMW M was still unknown. Ordinary sedans then had 100 hp, plastic wheel covers and church-bench seats. The E34 M5 arrived with jet thrust and murderous style.
A Balanced Predator
Pop the hood – it lifts forward on its hinge, revealing the engine. It isn’t just powerful, it’s beautiful. The block is tilted, BMW M Power script inviting you to read it, while the intake trumpets and mechanical throttle are on the other side. The numbers don’t lie – nearly 4 liters, 335 hp and 400 Nm are not for brutal drag launches, but for seamless acceleration and mile-eating. The S38 doesn’t scream like later M3 or Z engines, and it isn’t silky like BMW’s regular sixes. It vibrates, pulses with life – like the chest of an antelope after a long run. The M5 loves to be pressed in every gear.
A stab of the throttle and it surges, climbing through gears, sharper, stronger, richer with every rpm. This is the gift of individual throttle bodies – each cylinder breathing on its own, adding to the orchestra of six inline pots, four valves each, twin cams, chains, lifters, all producing honest mechanical music. The M5 was quick enough to outrun turbocharged Nissans, Mitsubishis, Mercedes SL500s and even the Corvette C4 – unless the engine had history with Lotus.
The E34 M5 carries immense balance, letting even a big sedan feel nimble when loaded up through a corner. It’s almost ego-boosting. No wonder BMW owners strut like peacocks. The steering sends back pure high-frequency feedback, even if a little loose on center. With big lock in tight corners, the rear follows aggressively, drifting into line until the suspension arms rein it in.
The Last of Its Kind
The E34 M5 represents the end of the round headlight, square body and natural dynamics era. Nothing feels like ornamentation with these cars, it’s a cohesive whole. It is also more sports car than luxury sedan and you realize it as soon as you pull on the lightweight doors. Drop into those hard, low, snug Recaros and you feel almost cramped if you weren’t slim. Around you: black plastics, an M-Tech wheel and a clear, Tetris-like dashboard. Everything in its place, function dictating form. The E34 is wild and free, closer to a grown-up E30 than a shrunken 7 Series.
The E34 M5 could have been the perfect do-it-all sports sedan if the line had ended there. But in 1998, BMW unveiled the E39 M5 – faster, smoother, more comfortable and a true high-speed train for the autobahn with high power, for the first time from a V8. So the E34 remained the last analog M5. It is pure, mechanical and alive.
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