Red leather you are right, it's for the chip + exhaust. The Dinan chip increases the M42's power from 137hp and 129 lb/ft to 148hp and 148lb/ft. The exhaust which is a axle back when used together with the chip increases the power to 158 hp and 155 lb/ft. This is all according to thier website
http://www.dinanbmw.com/