July 12, 2022 By Francis G. Pallarco Photos By by Jerel Fajardo

SLAMMED N’ BOOSTED Check out what’s hiding under the hood that adds a lot of go-power

Introduced during the nineties, the third generation 3-series, known as the E36 offered a distinct body style and performance all its own. With a range of body styles and engine variants including the highly sought after M3, it certainly drew a lot of following. Most especially here on our shores as it became a perfect choice for those looking for a premium European sedan. This certainly includes Mr. Mike Vasallo who owns our featured E36. Part owner of South HQ Auto which he describes a s a ‘one-stop shop’ as they specialize in mechanical, electrical, air con cleaning, painting, for all types of car brands. He’s also part of the growing BMW E36 Philippines group, which explains his affinity towards such cars

Having owned different BMW’s from a 7-Series, E38 to a 320i E30, Mike Vasallo certainly knows his way around BMW’s as he quips, “I’m a car guy who loves both looks & speed.” As for his current E36, story goes that his friend found it inside a warehouse as he adds, “I wanted to join the E36 Philippines club which is why I bought an E36 325i. Unfortunately, the car was a shadow of its former self when we first got our hands on it, but we at South HQ Auto did not give up on it. We wanted to restore it to its former glory and push it to even greater heights.” Working within the confines of the E36’s very tight engine bay, some of the challenges they faced include figuring out how to properly route the charge pipes that will go in and out of the front mount intercooler, turbo manifold fabrication, proper turbo sizing, fuel injector upgrade, fitting oil lines, replacing the MAF sensor to a MAP sensor type, ECU/Piggyback tuning, going through the engine’s internals and lots more make this undertaking very far from a taking a walk in the park.

“After many long hours of dedication plus lots of ingenuity we accomplished a complete engine overhaul and replaced the various parts and systems of the E36 to tailor fit it around our custom turbo engine with automatic transmission.” Regarding their chosen turbine from Garrett, as the name implies it’s called a hybrid because it is assembled with a combination of the exhaust side turbine and housing of a T3 and the air compressor turbine and housing side of a T4. Widely used for all kinds of engines, this hybrid turbine is factory rated to support 300 to 500 hp. According to Mike, boost is set between 10.5 to 12.5psi that gives them around 300 whp using a stock Motronic ECU with a piggyback for fuel and ignition control. Regarding the switch from Mass Air Flow (MAF) to Mass Air Pressure (MAP) sensor, the main reason is that MAF sensors are harder to tune based on what the ECU interprets for a given air flow. What happens is that the ECU will often misinterpret the MAF data as an actual load value instead of an actual number in Cubic Feet per Minute (CFM). Very much unlike MAP sensors that reads the actual load so there is no guessing what load level the engine is seeing. It certainly was a challenge as Mike explains; “This was a tall order since nobody had heard of it being done. In spite of the challenges, we knew we had the right people. Dan Olave of Danstoy Performance helped us out greatly on the project, as he was in charge of tuning the engine to match our strict specifications, working with him was our chief mechanic Hanks, who stepped up and delivered amazingly when tasked to make something that had never been built before.” Despite the additional power, the stock transmission is up to the task as Mike adds; “The tranny is taking it fine. If you want to feel the boost shift it to manual mode. We can always improve it by overhauling it and increase the torque converter or simply swap it out for a manual tranny if we were to race it.”

Handling seems to be any BMW’s forte and this E36 doesn’t disappoint as the stock struts have been swapped in favor of Dynamics fully adjustable coil overs on all four corners. Out back, the E36 comes with a Multi-Link Z axle set up taken from the ’89 BMW Z1 whose doors dropped down to the sills. Aside from the camber plate up front that allows for camber adjustments, the Dynamics coil over feature damping adjustment and infinite height adjustment that brings this E36 closer to the pavement and close the gap between the wheel arches and the 18-inch BMW Style 32 wheels on 35-series tires. Overall, this boosted E36 presents a clean and simple European sedan build with something serious under the hood, which is what I personally like as it closely adheres to the ‘Sleeper’ build ethos.  I think Mike has accomplished his mission, which he states, “To restore this old car from the ashes and build it up into something entirely new.” New and fast if I may add.



BMW E36 325i

Owner: Michael Vasallo

Part Owner South HQ Auto



Engine Type:      

2.5-liter, inline-6, DOHC, 24v

Engine Mods:    

Completely Rebuilt Engine and cylinder Head,

Custom turbo manifold, Garrett T4/T3 Hybrid Turbine,

Custom stainless-steel pipes, Front mount intercooler,

300cc Fuel Injectors, SARD Fuel Pressure Regulator,

HKS SSQV Blow Off Valve, Silicone Hoses,

Converted Airmass Sensor to MAP Sensor

Engine Management:  

OEM Motronic ECU w/ piggy back for Fuel and Ignition control


4-Speed Automatic,


300 whp


Dynamics Coilovers with Front Camber Plate,


BMW Style 32 Wheels, (18×8) Sailun Tires (215/35R18)

Interior Mods:  

Defi gauges (boost, oil press, water temp, oil temp)

Innovate Air/Fuel Ratio Meter, BMW MSport Steering Wheel,

Exterior Mods:        

OEM BMW Front Chin and Rear Spoiler

Kudos To:    

Sonson Lim of Dynamics Performance for providing turbo accessories,

Hanks Cucio Chief Mechanic of South HQ Auto in partnership with-

Dan Olave of Danstoy Performance,


For Inquiries:

South HQ Auto

#6 Aria Street, Barangay Sta. Cecilia,

Pamplona, Las Piñas

Mike Vasallo

Mobile: (0917) 883 3951


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