Let’s start with the fact that we love the S54B32. The engine started life in the late Z3 M Coupe then moved to the E46 M3 and finally ended life in the Z4 M Coupe. And those just happen to be three of our favorite M cars of all time. So why all the love? Let’s let our friends at Jalopnik (who both asks and answers the original question) take it from here:
What makes the S54B32 so wonderful is the noise. It’s the only engine this side of supercar lunacy that has such a—for lack of a better word—voluminous sound. You’ll know it when you’re around one when the air around you suddenly fills with this high-grade metallic substance, this gray-blue vapor of noise that fills an S54B32’s surroundings with such fearful urgency.
Yes it’s the noise. It’s also the feel and the hi-revving nature of the engine. Then the look. Oh and it’s an inline six. The hardest to package yet more inherently smooth configuration for an engine made today.
Of course the answer is pretty compelling. BMW retired the engine because they needed something that made horsepower while matching the cylinder count of their rivals (the S4/RS4 and C63 to name the most obvious).
But it doesn’t mean we don’t absolutely love it. In fact it’s one of the biggest reasons that your author almost bought a Competition Package E46 M3 a few months back.