BMW M40

The BMW M40 is an inline-four SOHC piston engine which replaced the M10 and was produced from 1987–1995. It uses a camshaft belt like the 6 cylinder M20. Displacement ranges from 1.6 L to 1.8 L. The direct successor was the M43, which uses a chain driven camshaft, however in 1989 BMW also released the M42, a higher performance DOHC four-cylinder engine with the same block dimensions as the 1.8 litre M40.

The M40 engine uses Motronic 1.3 fuel injection system, has hydraulic tappets and are known for ticking over time, this is usually due to wear from oil starvation and poor maintenance, also M40 engine is more susceptible to lobe wear than any other E30 engine, usually caused by a blocked oil spray bar and a poor combination of materials. When the cam is worn, the engine will not "rev" high and the only solution is to replace it. Despite that, the M40 engine is in general a reliable engine, with some units approaching 300.000 miles without being overhauled.

M40B16

The M40B16 is a 1.6 L (1,596 cc) version of the M40 producing 102 hp (76 kW) and 105 lb·ft (142 N·m) of torque. The E30 version uses Bosch Motronic 1.3 fuel injection, while the E36 version uses Motronic 1.7.