Probably one of the most noticeable performance upgrades is changing the final drive ratio. Combined with a limited slip differential is the perfect combination. Standard final drive for the manual e46 330Ci is 2.93 which is WAY to tall. Raising this to 3.73 or 3.91 would be more competitive giving better acceleration at the expense of top speed. Bokchoys.com have a fantastic calculator for the e46. Input your tyre size, select your gearbox and RPM limit, and hit calculate. They also have a list of the standard gearbox ratios and final drives (click here.)
On my car, using the standard 2.93 final drive, and rev limiter set to 7000rpm gives us a geared top speed of 177mph! (PDF here 2.93WET225:45R17). A 3.91 final drive would reduce this to 133mph (PDF here 3.91WET225:45R17) which is much more realistic and a 3.73 is somewhere in between at 139mph (PDF here 3.73WET225:45R17). Even the 3.46 out of the autos would reduce the Vmax to a more reasonable 150mph.
My M54B30 3 litre engine develops maximum torque between 3200 and 3500rpm where it starts to tail off. Peak power is delivered at 6,400rpm. Raising the rev limiter from the standard 6500rpm to 7000rpm has no real benefit in torque, and as we all know it’s torque that gives you acceleration. Increasing the final drive ratio will have the effect of requiring more gear changes, however the power delivery is temporarily removed during each change. A balance needs to be struck.
(Update May 2021)
I’ve decided therefore, having spoken to others, that the 3.73 would be the perfect final drive for our purposes. It limits the Vmax to 139mph on wet tyres and 136mph on dry tyres.
The longest straights on circuits in the UK rarely see speeds in excess of 125mph at this power level so anything above this is wasted. The 3.73 analysis for the DRY is here: 3.73DRY235:40R17
At the 7000rpm redline the maximum speeds in the gears are as above.
or at a more manageable 6800rpm the Vmax is 132mph, changing up to 5th at 112mph and 6800rpm. Perfect!