If the E30 320is is powered by an M engine, why is not badged as an M model?
The reason the E30 320is is not badged as an M model ultimately comes down to marketing: Unlike the limited-production M3, which was created primarily as a competition machine and utilizes many unique exterior body panels and chassis components, the 320is was never intended to be a homologation special. It was conceived instead as a sportier and more affordable alternative to the torquier and more refined 325i, which was taxed heavily in Italy and Portugal due to its 2.5-liter engine.