Part Two — Interview with Mike Miller

Here’s the second part of my interview with Mike Miller, writer for Roundel and Bimmer Magazine. Part one was published Monday.

Thanks again Mike for agreeing to take these questions, and thanks also to the forum participants for helping me come up with the questions. Don’t agree with something you read below? Drop a comment, and I’ll ask Mike to respond.

When do you think a clean, 100,000-mile E46 M3 will be fully depreciated?

Mike: History tells us that the market views different M3s differently – just look at the difference in today’s sale prices of comparable-condition E30 M3s vs. E36 M3s.

I have a feeling the E46 M3 is going to be viewed as the last of the Real Man’s M3s, with a dipstick, an engine that makes the driver sing for his supper while getting decent fuel economy for what is basically a hand-built racing power plant, a suspension capable of perfectly neutral handling with the right aftermarket parts, in an overall package that is small enough and light enough to be fun to drive even when you’re not going 120 mph. Yes, that’s a reference to the E90 M3.

To answer your question, full BMW depreciation today comes close on the heels of warranty expiration, almost regardless of model – garage art like Z8s don’t count. But the real question is whether well-preserved stock or tastefully and subtly modified E46 M3s will eventually begin to appreciate and morph into collector cars just like the E30 M3 did. I believe they will, although probably not to the extent of the E30 M3 owing to the rarity of the latter.

I believe the E36 M3 will have its day as well. It’s hard to find a nice, clean, well-maintained example that hasn’t been modified out the wazoo. And it’s going to keep getting harder, not necessarily due to attrition alone but because it’s the new track car for younger BMW enthusiasts. Look for the best examples of the E36 M3 to start creeping up in value, clean cars, relatively stock, and especially in rare color combinations.

Do you have a top 10 list for mods/DIY to improve the typical enthusiast BMW, once all maintenance issues are addressed?

Mike: No, because I tailor my advice to the needs, wants and budget of the individual reader. But I’ll write a top ten list here if you want. In no particular order:

1) Unless you live in Virginia or Washington, DC, where they are illegal, install a really good hard-wired radar detector.

2) Remove the clutch delay valve. It doesn’t matter much to me but most people seem to prefer the clutch action without the CDV.

3) Unless you live where a flat tire would endanger your life (in which case you should consider moving) ditch the run-flat tires in favor of normal tires, and get a donut spare and a jacking kit. The car will handle and ride much better with normal summer performance tires. You may also want to get a camouflage bag in case the gigantic wheel and tire you remove won’t fit in the car!

4) Install an aftermarket high-performance muffler that you can hear while driving. It will help you shift more smoothly. You do have a manual gearbox, right?

5) Go to a driving school, either a BMW CCA event or a professional school. The absolute best way to improve your car is to improve your own driving skill with professional instruction. If you drive in snow, seriously consider the Bridgestone Winter Driving School in Steamboat Springs, Colorado.

Bear in mind that even though driving schools are instructional in nature, to the car the driving demands are the same as all-out wheel-to-wheel racing. This means more maintenance is advisable and more repairs will be required if you wind up being a track addict.

6) If your car doesn’t have a left foot rest, get one. BMW has them available for many models. Look under accessories and retrofittings in parts group 51 on realoem.com. It’s nice to have a left foot rest to brace yourself in the twisties.

7) Get four snow tires, with steel wheels if available, for winter use regardless of whether the car has RWD or AWD. If you drive in snow, this is the single best thing you can do to save your own life as well as drive with authority in winter conditions, rather than “just get around.”

8 – Get a performance chip or software download. The older the BMW the more power it will produce, but on some more recent models it makes no power at all. But the software still improves throttle response and drivability. The downside is you’ll need to use high octane fuel all the time and maintain the engine to a higher standard than BMW’s current recommendations.

9) If you want to improve the performance of the car in a way that you will enjoy most often, my advice is to focus on the suspension rather than the engine. Most BMWs today have a great deal of engine power, more than enough to do what you want them to do. A damn good set of shocks – Bilstein or Koni — is the probably the best thing you can do to improve your enjoyment of the car.

10) This isn’t really a mod, but the fewer doo-dads in your car the more you can concentrate on driving – and the lower your repair costs will be over the long haul. An “enthusiast build” BMW has a manual gearbox, sport or M sport package, xenon headlights, and little more.

Based on any info you have to date, what’s your take on the upcoming 1 series M Coupe?

Mike: I don’t have any more information on the 1 Series M Coupe than you do right now (Oct. 2010). Speaking purely speculatively, I expect the car to be more fun than an M3. Part of this has to do with size, part of it with weight, and part with it being – and I’m guessing here – not as perfect as the M3. The elusive sense of satisfaction from a perfectly executed corner or matched-speed downshift in a car that requires skill to execute both — the driver/vehicle interface I mentioned above — diminishes where the car is perfect and all the driver has to do is steer and have the balls to mash the throttle because the car itself does all the heavy lifting.

In my opinion the 1 Series is the most fun car BMW makes today, bar none, including the M3. Does it understeer? You bet. All BMWs do; if they didn’t, physicians across America would by flying off the road left and right in their 415-hp Bimmers. Understeer is also the reason why they make aftermarket suspension parts – neutral handling is available for drivers who can handle it.

Still, I have a feeling that I’ll continue to enjoy driving the 128i sport package six-speed more. Like many moderately-powered cars today, the 128i just demands more from me than any M car today, and I like that. Bear in mind though, that I’m a street driver and I assess this sort of thing on twisty mountain roads. Smaller and lighter is always more fun to me than 400 hp (or whatever) on twisty mountain roads.

What are your thoughts on the move to electric cars in general, and the BMW Megacity project in particular?

Mike: Excellent question!  I don’t think there is a move to electric cars. I think gasoline and diesel fuel will remain the most efficient fuels for cars for many decades to come.

Surely, electric cars will be produced but only because of CAFE requirements in the U.S. as well as a media-fed misperception among folks endeavoring to be “green” that electric cars result in less pollution. The reality is we don’t know if they produce less pollution. I’ll explain that in greater detail than you probably want, and preface the explanation by noting that I hold a Master of Environmental Law degree from Vermont Law School, so I’m switching hats for this question.

All environmental analysis should begin with the proposition that all human activity creates pollution. Remedial measures and technology aimed at reducing pollution have to be evaluated in terms of the total pollution that results from the endeavor as a whole, from cradle to grave, in order determine whether there is or is likely to be a net reduction or even an increase in pollution, or whether it’s close enough to constitute a grand waste of time and money. Unintended consequences need to be foretold and examined. A great example is the process of recycling, which uses a lot of energy that never gets figured in to the equation – people just assume recycling is a great thing, and it usually is but not always.

Every time someone talks about mandatory recycling, folks with my training immediately think about banning 95 percent of the plastic crap out there and going back to refillable glass bottles, paper packaging, and metal parts construction that lasts longer and therefore gets recycled less.

Of course, any such scientific examination would run headlong into politics and special interest groups. I am not saying electric cars are a grand waste of time and money. I am saying we really don’t know. Regardless I would be very surprised if electric cars constitute 10 percent of the U.S. fleet in 20 years short of some monumentally inefficient government mandate or incentives. But let’s talk about them anyway.

Theoretically speaking, electric vehicles in general make a great deal of sense for urban commuters because they eliminate localized air pollution that would be created if the driver had opted for a gasoline or diesel-powered vehicle – and they do so in urban areas that tend to have air pollution problems. Electric vehicles also tend to be small and therefore easier to maneuver and park, as well as devoid of the doo-dads that are simply not required for the urban commute.

That said, there is a big HOWEVER to follow.  First, as a practical matter, electric cars have to be plugged in to recharge the batteries. Urban dwellers, for whom electric vehicles make the most sense, often do not have a readily available electrical outlet to plug in their car. Electric power also makes the vehicle a commuter car only, rather than one that can be taken on weekend road trips out of the city or on holiday to visit distant places. That would be a hybrid, and then you run into the fact that small diesel cars are cheaper and just as fuel efficient as hybrids.

Second, the electricity used to recharge the batteries in an electric car will, in all likelihood, continue to be produced in a coal-fired electricity generation plant for the foreseeable future in the U.S. market, which pollutes more than the gasoline or diesel-powered engine the owner opted against. Clean coal technology is certainly out there and it will become a reality, but it is far from being universal right now.

Third, taken as whole, electric cars simply do not pass the financial cost/benefit sniff test. Unless and until they do, their appeal will be limited to diehard environmentalists and rich folks who want to appear more “green.”

Fourth, I see crash worthiness of electric vehicles in general becoming an issue in the U.S. market sooner rather than later, because they are small and lightweight vehicles and their passive safety systems will have to be made smaller and lighter as well. Before too long electric commuter cars will start to be punted into the trees by 6,000-pound SUVs or squashed by 18-wheelers, with predictable results for the electric commuter car occupants. Next thing you know Old Jed’s a millionaire – the lawyers will pounce and the media will have a feeding frenzy.

I fully expect the BMW Megacity to be the best electric commuter car available and the most fun to drive, to the extent any of them will be fun. The problem I see is cost – I don’t think BMW cachet is going to justify the $30,000-$40,000 electric commuter car. The decision to bring the Megacity to the U.S. may come down to simply improving BMW’s CAFE numbers. Look for them to be sold in the major coastal cities populated by well-cashed BMW buyers: Boston, New York, Washington, San Francisco and Los Angeles. Again though, in order to be wealthy enough to have a garage with an electrical outlet in these cities, Megacity owners will also be wealthy enough to own an SUV right alongside their feel-good electric car.

The Europeans are likely to buy the Megacity in far greater numbers than Americans, and I also think the Europeans are likely to solve the no-electrical-outlet problem faster, albeit with some sort of classically inefficient EEC government mandate.

In the final analysis, I think improved public transportation and, to a certain extent, more biking paths would be better short-term solutions to urban commuting issues than electric cars. The long-term solution is likely to be telecommuting for as long as the knowledge-based economy endures. I don’t think it will endure forever and I believe that the current urbanization trend will one day reverse itself, but probably not in our lifetimes. Folks also need to live closer to where they work rather than demanding McMansions on sprawling developments built on prime farm land. That may not work in enormous metropolitan areas but it will work in small-to-medium-sized cities, many of which already have wonderful single-family houses built on perfectly-livable quarter-acre lots in close-knit neighborhoods.