Three problems related to suspension have been reported for the 1998 BMW Z3. The most recently reported issues are listed below. Please also check out the statistics and reliability analysis of the 1998 BMW Z3 based on all problems reported for the 1998 Z3.
The BMW e36 Z3 1996-2002 (I have the 1998 1. 9) are prone to having a separation of the rear subframe from the differential causing the drivetrain to hang off the vehicle and/or rip out of the trunk's weak aluminum sheet subframe. BMW germany has acknowledged the problem for a few individuals over the past decade and a half and kept it on the low for them to not spread it further. BMW north America fails to acknowledge the design flaw during their manufacturing process in the north american plant during the late 90s. The spot welds' quality is subpar and worrisome as this catastrophic failure of the subframe to driveline structure has various ways of presenting it self which chiefly includes popped spot welds in the truck which comes hand in hand with a cracked differential ear bracket. * to simply understand why this happens: the issue is that the metal of the trunkfloor is too thin and not adequete at holding up to the forces of the differential tugging at it. There have been documented cases of similarly "repaired" Z3's that end up basically pulling out and/or deforming the entire trunkfloor panel. The metal panel the diff crossmember is structurally tied to (and the trunkfloor itself which is above it) is simply too weak for the forces being applied through it. Adding more welds simply changes where the failure occurs - from pulling out spotwelds, to deforming the trunk floor/crossmember itself if there are too many welds for them to be able to be pulled out. There are a few kits going around that other owners have addressed to their vehicles for a few thousand dollars which includes welding and a re-fabrication of the trunk floor's structure to the subframe/chasis. It has two "caps" that sit on the framerails at either side and a "crossmember" piece which is a strong piece of metal that spans between the two frame rails and sits on top of the "caps". When installed, the differential ends up tugging at the crossmember, which then distributes the forces. . . . .
I have a 1998 Z3 m roadster and the trunk welds holding the subframe is failing. This is a commonly documented issues. BMW dealers acknowledge the issue but BMW north America will not fix it. This is a welding/manufacturing defect that can lead to the differential and suspension components in the rear to completely separate.
A loud clunking sound coming from rear end was noticed. Upon inspection, by BMW dealership it was determined the rear subframe holding rear differential has separated from the body of the vehicle (spot weld failure). I was told it is extremely dangerous to drive and to fix immediately. Upon further research, this appears to be a very common problem with these vehicles. Higher displacement models are a higher occurrence due to creating more torque on the rear differential bracket. Mine is the m version which is almost a guaranteed failure.
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