Than what ? There are loads of 3-Series with well over 200bhp. There's a couple with over 300bhp.
Er, they don't need to - they already make engines with enough power ! You'll find that most modern NA lumps aren't tuneable - at least not without spending mega money.
...and an underpowered shed compared to any of the more powerful factory
Now I wonder where exactly are you getting these power figures from? Out of your ass? The new BMW range? Now the M50 e36 engine which is 2.5 litre produces 198 bhp standard and the e36 produces 319 bhp standard, so what do you suggest. I buy a 2.5 litre inferior engine for oh around 4.5k or an m3 engine that will easily set me back 8k+. If you are talking about 5 series engines then they are giant de-tuned hogs that would and have caused heat problems when transplanted.
The vauxall engine is a superb lump, easily capable of 400 bhp+ and its cheap. If you have money swimming out of your arse, yay for you. But i'm talking about an original and affordable idea.
If you havn't ever been in a gsi3000 then you can't judge it, your just making assumptions.
No way: LC chipped goes 500HP for a mere 800 UKP. I know one car in that state (has now 42000 km on the clock). Owner likes the car but also has the complete history, up to the fuel bills. Scary stuff :-)
Besides the engine-side you've got the gearbox and drivetrain: I remember a (build in gold) diff from a Bathurst racer, brakes which costs an arm and two legs, etc. LC never was a reliable nor easy to maintain car.
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