BMW E38 (1994–2001) — History, Engines, Weak Points, Fuel Consumption

The BMW E38 is the third generation of the 7 Series, produced from 1994 to 2001. Many consider it the last truly analog BMW flagship: the electronics were already complex by mid-90s standards, but the body and chassis stayed recognizably "Bavarian" — without the extra weight and electronic hand-holding of later generations.

History

The E38 replaced the E32 in 1994, bringing a noticeably crisper, more overtly luxurious design and treating the long-wheelbase (L) version as a proper mainstream option rather than a rare special order. It was the first 7 Series to offer satellite navigation (in select markets), a rain sensor, and xenon headlights as available options.

A 1998 facelift (LCI) updated the bumpers and some electronics, and — most importantly — brought the M62TU engine with VANOS on both camshafts and an Alusil aluminum-alloy block replacing the earlier Nikasil-coated one. At the top of the range sat the 750i/750iL with the 12-cylinder M73 — at the time, the most powerful production engine BMW had ever built.

E38 production ended in 2001 with the arrival of the design-controversial but technically groundbreaking E65. Alpina built its own B12 variants on the E38 platform, prized separately by collectors.

Engines

Diesel:

• M51 — 2.5 L inline-six in the 725tds, the first diesel offered in a 7 Series for the European market.

Petrol — inline-six:

• M52 / M52TU — 2.8 L in the 728i/730i; a durable engine when serviced on time, though frankly modest on power for a flagship sedan.

Petrol — V8:

• M62 (pre-1998) — 4.0–4.4 L in the 735i/740i; early Nikasil-coated cylinder bores are sensitive to high-sulfur fuel — running on poor-quality petrol accelerates coating wear.
• M62TU (from 1998) — same displacement range but with an Alusil block (eliminating the Nikasil issue) and dual-VANOS — noticeably more reliable and efficient than its predecessor.

Petrol — V12:

• M73 — 5.4 L V12 in the 750i/750iL, 326 hp. The brand's flagship engine at launch, smooth and quiet, but demanding to maintain given its doubled ignition and injection systems.

Weak Points

• M62 Nikasil bores (pre-1998). The headline issue of this generation: early M62 cylinder coatings wear rapidly on high-sulfur fuel, causing compression loss and increased oil consumption. BMW replaced engines under warranty; on the used market, check whether the block was replaced or if you're looking at an original TU unit.
• M52/M62 timing chain guides. Wear with mileage and eventually need replacement — ignoring the symptoms leads to a more serious repair.
• Rear air suspension (EHC). On the 740i/750i, the air struts and compressor develop slow leaks over time — a common expense on older cars.
• Comfort electronics. Seat memory, climate control, and the onboard computer — complex by 90s standards — can develop faults as wiring and control modules age.
• Automatic transmission (GM 5-speed on the 740i/750i). Prone to shift shock at high mileage if the transmission fluid hasn't been changed regularly.
• Cooling system — the usual set of aging plastic hoses and expansion tank typical of BMWs from this era.

Fuel Consumption

Average combined-cycle figures — expect higher real-world numbers, especially on long-wheelbase versions:

Engine	Model	Consumption, L/100km
M51 (diesel)	725tds	~9–10
M52/M52TU	728i / 730i	~11–12
M62/M62TU	740i	~13–14
M73 (V12)	750i	~15–16

Owner Feedback

Recurring themes from reviews and enthusiast forums, without quoting specific owners:

E38 owners consistently praise the exceptional ride smoothness and cabin quietness — qualities that still favorably distinguish this flagship from many modern sedans. The V12 750i is praised for engine refinement and silence, though owners caution about higher maintenance costs from its doubled ignition and injection systems. On the M62, the near-universal recommendation is to seek out a post-1998 TU version or verify the block-replacement history on an earlier car. Otherwise, the E38 is characterized as surprisingly robust and repairable compared to the electronically overloaded flagships that followed it.

Photos