This BMW E30 318i Touring started life with a 1.8 L M40 inline-four and automatic transmission. The current owner spent five years improving the car’s performance and handling. He began by replacing the factory engine and transmission with a 4.4 L M62 V8 and six-speed manual transmission from a BMW E39 540i. The engine was rebuilt with CP pistons, sleeves, custom exhaust manifolds, and a supercharger. It makes around 490 horsepower and 430 lb-ft of torque on 7 psi of boost. The transmission uses an upgraded clutch and lightweight flywheel and the differential is from a E28 M5. Listen as the owner explains how he built this sleeper before taking it out for a test drive.
Source: Living Life Fast via Piotr