This M-inspired 1995 BMW E34 540i of Jason Grace is proof that you don’t always need to start with an M, you just start with the best BMW you can find.
When it comes to the bigger 5-series, the M5 is the car everyone yearns to own in the BMW community. Just after that is the M-Sport version of the 540i, but if you already know you’re going to changing parts and making the car yours, why start with those and quickly devalue either of them. So, Jason Grace of Dana Point, California found this 1995 E34 in Northern California in 2015. He couldn’t inspect this second owner car himself, so he sought out the help of CaTuned in Sacramento for a pre-purchase inspection (PPI). “My only concern was the mileage being as high as it was (editor’s note: it had 224,000-miles at the time he had it inspected),” he explained, “(The owner and I) talked a handful of times on the phone and he agreed to the PPI. When the inspection came back clean with great compression numbers, I bought a one-way ticket up there.”
This also wasn’t his first E34, as Jason continued, “The reason I was specifically looking for an E34 540i six-speed was due to its limited production numbers and wanting to upgrade from my E34 525i, plus I’ve always been a sucker for V8s.” He drove his new E34 the six-hours from Sacramento to its new home. At first, it was just a light restoration he was aiming for, “My original plan with the car was to get it looking and performing like new or as close to it as possible,” he explained to us, “I started with the suspension and brakes, worked my way to subtle interior upgrades, and finished the initial stage with a full M-Sport body kit, and upgraded lighting.”
What we’re seeing is its latest stage that began when he began to desire more power than the original 4.0-liter V8 put out. Jason found an E38 M62 engine and pulled out the M60 that was currently in it. “During this time, I had the vision to rid the car of all chrome or polished metals,” Jason recalled, “so I had all the trim painted black to match the Shadowline trim that was no longer available from BMW.” That’s when he began sourcing parts like a set of genuine Hella smoked Euro headlights. These were then modified to work with a Squared Motorwerks D2S bi-xenon projector retrofit.
That great stance comes from a set of Ground Control coilover sleeves with 550-lb/inch front and 440-lbs/in rear Eibach springs. The Koni race level dampers keep suspension movements to a comfortable level for Jason. Even so, that new ride height required the fenders to be rolled for proper wheel and tire fitment. The side skirts and rear bumper are from BMW’s M-Sport line. The front bumper is factory but altered with a fog light delete.
For better looks and some improved steering feel, the M-Tech II steering wheel is wrapped in Alcantara with red stitching, tying the fabric together around the steering wheel frame. What’s most amazing about this interior is that it started as a parchment (beige) color and Jason took time to acquire the parts to make it all black inside. Those parts are also either OEM BMW replacements or recovered BMW parts.
A pair of hidden buttons reside in the under-dash cubby hole aren’t for anything sinister like Spy Hunter-esque oil slicks or anything like that. Rather, the left button resets the trip meter and the right toggles through the different parameters on the dash. We’ll talk more about that Haltech dash display in a moment.
Matching that M-Tech II steering wheel is an Alcantara wrapped ZHP shift knob.
All of which matches the handbrake handle and both the shifter and handbrake boots are of the same Alcantara material.
Hypebeast fans will recognize the Supreme x Fox Racing Gloves, which sit on top of the M5 shifter surround that mates up to the rest of the E34 center console.
Here is that Haltech IQ3 Street dash display we hinted at earlier. As the name mentions, it’s designed for streetcar use and includes lights and displays for common duty parts like turn signal indicators, high-beam indicator, trip and odometer readings, and others. However, it is a utility item born from racing as it gives you the ability to add more readout parameters, be used with aftermarket engine control units (ECUs) along with OBD-II from a stock ECU, and perform as a data recorder. That’s what the slot in the center is for: you install a micro SD card in it, and it will record data the dash can see. You’ll then use Racepak Datalink II software to read it all back to you on your computer.
You also want your feet to feel right as you heel-toe downshifts, so a Pedalhaus machined pedal set allows Jason to have the right feel and grip for rev-matching.
Comfort for long drives and securing yourself while driving hard requires a seat that can perform double duty. These Recaro SRDs were chosen by Jason, and they were wrapped in a mixture of Alcantara along the bolsters, while the seat bottom and center-back are done in M-logo fabric sourced through Graham from BMW Fabric. The center panel of the seatbacks are done in M colors of red, purple and blue and recall the hurricane M-logo from the legendary E31 M8 prototype. It was a prototype that never came out officially, but BMW did produce one.
“I sourced some remanufactured M8 interior fabric and Alcantara suede,” said Jason, “and had the seats and door cards retrimmed by Albert at AP Upholstery in San Diego. So many little details were addressed during the interior swap including red ‘BMW Motorsport’ seat belts, Alcantara M-Tech II steering wheel, and Alcantara ZHP shift knob, e-brake handle, and boots.”
The rear seats are “breadbox” style, turning this BMW E34 into a true four-seater as the rear only fits two people. However, it is also finished in the Alcantara and hurricane M-logo design. Both front and rear door panels are also done in Alcantara fabric as well as the headliner and parcel shelf.
Now. Now we get to the fun stuff with the engine swap. This M60B44 was opened and Frankenstein’ed. The shortblock is the B44 that was cleaned, blueprinted, and balanced for perfection. During that work, a set of M60B40 heads were sourced and ordered to get the works: ported and polished intake and exhaust ports, five-angle valve job, and refitted with better parts. This combination resulted in a displacement increase from 4.0-liters of the original E34 to the new 4.4-liter V8 with 11.5:1 compression.
The intake manifold is from an early M60 and features velocity trumpets from the factory as well as larger runners for increased airflow from the 84mm ported throttle body. Attached to those runners are new Bosch 20-lb/hr injectors that are fed 91-premium (ok, California premium) fuel by a 255-lph pump. The custom Castro Motorsport four-inch intake attaches to the 85mm throttle body with a custom airbox surrounding the air filter. Angry Ass Limited developed a new underdrive pulley for the power steering pump that reduced the power loss but did increase some of the effort behind the wheel. Angry Ass Limited also developed an underdrive water pump pulley for this engine.
The exhaust is custom and made purely for flow. The custom headers are wrapped in heat shielding and lead into a custom-made x-pipe. This leads to a pair of resonators but nothing else, its all straight pipe with no mufflers or catalytic converters. With a Haltech 2500 Elite ECU tuned by Turbo Joe at Castro Motorsport, the engine puts out 317-horsepower at 6000-RPM and 325-lb-ft of torque at 4500-RPM on the DYNOmite hub-attached dynameter. This is after going through a resealed Getrag 420G six-speed, its Spec Stage 3+ clutch and aluminum flywheel, and BMW original 3.15:1 differential with an LSD from an E32 BMW.
Under the hood, you can also see the Ground Control camber plates, which sit atop the Eibach springs and Koni race dampers.
That’s useful as it gives Jason the option of cambering in the front wheels to allow them to tuck in properly. Those wheels are a set of Rotiform LVS three-piece wheels in 18x9 +13 front and 18x10 +8 rear. These wheels are enveloped by Michelin Pilot Sport 4S tires in 255/35R18 front and 275/35R18 rear, but their movement is guided by a set of E31 lower control arms that have had spherical bearings installed in place of the compliant rubber. Front chassis stiffening is achieved with an E31 X-brace and ties the lower control arms together, reducing movement under high corner loads.
The upper control arms are E34 parts but feature Moosehead Engineering spherical bearings. Bumpsteer is also controlled by a set of AKG Bumpsteer Correction Spacers that sit between the knuckle and outer tie-rod. Further, roll control is done by a set of Racing Dynamic swaybars.
Going fast is awesome, but you will need to stop at some time. Jason does that with a set of Brembo four-piston calipers from an E31 with stock E34 540i calipers in the rear. These embed a set of Hawk HP Plus pads into Stoptech Slotted Rotors measured out to 324x30mm front and 300x20mm rear.
When we asked what Jason felt set his E34 apart from others, he had a think and stated, “The biggest thing that sets my car apart from other E34 builds is all the attention to detail, and only modifying the car in a functional, "OEM Plus" kind of way. Countless hours of research have gone into every single decision with this car and partnerships with only the best in the business.” Is more coming for this car? “My future plans are a full fuel system to support 1000+ HP and E85, single turbo, and eventually an M60 built for boost.” That’s going to require quite a bit of work, but even he admits that’s going to be a long while.
“It’s hard to pick a handful of modifications and say they’re the best,” he first admitted when we asked him which part he liked the best of the changes done to his E34, “the car is such a complete package and each modification really complements the next.” After a little prodding, we got him to admit what his favorite was, “If I had to choose, it’d be the built, high compression, stroker motor; it flat out rips!”
With so much effort put into it and the results from it, we’d have to agree. No more LS-swaps in our BMWs! Let’s do more BMW V8 strokers!
Story by Justin Banner
Photos by Antonio Alvendia
If you enjoyed Jason's BMW, you can find additional BMW-related content at bmw.fcpeuro.com, as well as more build features like this one, here. If there's anything specific you would like to see, or if you have any questions/comments, leave them in the comments section below.
Antonio Alvendia is an aficionado of cameras, rare wheels, hip hop, and obscure aftermarket car accessories. He bought his first E39 Touring after seeing M5 Estates on photo trips to Europe, and now has sights set on restoring a classic Mercedes. Antonio was a principal photographer on the limited edition hardcover book on Singer Vehicle Design's Porsche 911 builds, entitled One More Than Ten. Future goals include returning to the Nurburgring to shoot the N24 race and driving the Nordschleife again. ••• Instagram : @MOTORMAVENS