S54 engine into late model E36 swap (same 318ti)

[Hakentt-MS41.1]

Not a TI but information is the same.

Rather than buying boring S52 for my 1999 323is, I decided to go with S54B32 and do it with least amount of money spent (on a tight budget). Goal is to buy an excellent condition late production S54b32 engine with low miles so that I don’t have to spend extra money on updating engine bearings, water pump and other expensive parts and to get it as complete as possible. I found one from wrecked 2006 on ebay for 4.5k plus I asked the seller to include few more parts that I would need for swap. So it all came out to 5k delivered to my door. Not bad considering the fact that I would spend 3k for a very nice S52 engine.

After inspecting the engine I can say I am lucky, the engine is very nice condition, look trough the oil filler hole and I can see camshafts are all clean and look great, no oil burns.




Preparing the S54 for installation:
My engine came with SMG clutch and dual mass flywheel, I could use that, but I am afraid of that self adjusting pressure plate, I just did not want to risk it. So I went with S52 stock setup that I had used, I just bought the 240mm $65 saschs disc from ebay and it is for E46 because I could not find 240mm disc for E36. The only difference is that E46 disc has stronger structure of the disc = better. S54 starter works fine with S52 flywheel, same teeth and spacing.
I decided to use the weak Getrag 250 that came in my 323is, because I won’t be drag racing my e36 so it will hold plus it is very light weight.
Before you install the engine I would recommend that you change the front and rear crank seal with the older spring loaded lip version seals, they last much longer. And there is a oil plug on right side of the block in the rear up corner, that seems to leak over time, I filled mine with jb weld.
Use, E36 mounting arms, E36 engine mounts will work with 3mm spacer, S54 is heavier so the mounts will sink, especially the right side one, I used 3mm tick washers to compensate, because engine sits very close to rack and pinion.
S54 heater hoses will work, the longer one will have to be cut to fit, the shorter one is direct fit. If you will be installing the engine with intake manifold then install the heater hoses just as about as the engine goes in cut the hose and clamp it, if you install the engine fully you won’t be able to get to the hoses.
S54 headers with catalytic converters fit fine and clear everything with plenty of room for movement.
S54 alternator is controlled by the DME, and DME sends the charge signal to the cluster. I think S54 alternator must be used.
S54 power steering pump should be used too, pulley is different diameter, I think E36 pump would work.






With the engine package I got the seller to include cut section of both flanges of midpipes. I must use what I have, so I used stock 328i exhaust system, to get the full benefit of having nice quiet exhaust I cut the mid section right after the catalytic converters, then went to autozone and bought 4 two inch 40 degree pipes and one straight that I cut in to two. Bolted it all on the car then aligned the pipes and spot welded them, took them off the car and put nice weld on them. Total cost $45.




You got to use E46 fuel filter with 5 bar regulator, it fits stock location just fine, cover protector fits fine also.



Stock M3 smg vacuum/booster hose will fit fine, it needs to be properly routed then cut to fit, there is a vacuum jet pump and bleed off solenoid that fit in that line, very straight forward.



Use, stock E36 A/C compressor parts, they will bolt right on S54, must use shorter belt 5PK865, the vanos accumulator will have to be moved back more. I used E36 dashboard shim, bolted it to the block then used a hose clamp to secure the accumulator. Notice the E36 gauge temperature sensor bolted in coolant drain plug? No need to spend money on hose adaptors.
Lower intake manifold support, I used E36 dashboard shim, bolted it to the block then used long 8mm bolt with 3 nuts, worked out very well, no need to manufacture a bracket.


I chose to use E46 M3 coolant bottle with mounting bracket, sense it was included with the engine. I modded the bracket and test fitted the tank to sit as high as possible without interfering with the hood insulation, the tank has to sit at higher level than the last row of the radiator for proper air bleeding. M3 hose won’t work, I removed the hose from quick connect ends then used a Gates(19607) cut to fit, put two clamps on there.




E46 M3 SAP air valve hits A/C line and will have to be adjusted, I spun the valve around then created small extending adapter from E36 SAP hardware.


E36 radiator with shroud fits, E36 318i clutch and fan must be used. E36 hoses, upper fits fine, the lower needs 1/2 inch trim on the radiator side to fit like a glove. 5/16 coolant hose can go from the radiator trough E36 fan shroud to coolant tank in one peace.


Stock E46 M3 oil cooler can be made to fit under the radiator but I did not like that location, plus the seller wanted to much for the cooler, but I got the E46 M3 cooler hoses. I cut the cooler hoses right at the crimped clamps at engine side, then I went and bought dual row oil cooler from local VW store, (EMPI 9243) $38 cooler, and 4 feet of gates transmission ½ inch hose. Bolted the cooler on the auxiliary fan body. Fits great just under the bumper frame.



Using stock E36 SAP pump, the E46 SAP valve opens on pressure from the pump flow so there is no vacuum line to it. E46 hard line connection to hose.


This is how right side looks right now. Windshield washer system will have to wait for solution. I never use it anyway.