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Seems most of you forgot about the beloved E30 M3, it had a 4 cylinder with 190 (and later 215 and more) horsepower while the 325i had a larger 6 cylinder with only 170 horsepower.
It makes sense to me to have a 235i, M235i that is a bit sportier and looks different, and then an M2 with a lighter 4 cylinder in a lightened car with even more power and M suspension, steering, bushings,etc.
In this case, copying Audi's stratification with their A, S, and RS models is a good thing.
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