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BMW M54 6-cylinder Oil Smoke and Smell – Valve Cover Gasket and Oil Filter Housing

February 6, 2012

This answer is applicable for many BMWs in addition to the one listed below.

car year: 2003
car model: 330Xi
Otto, For some months now, I have been detecting the odor of an acrid burning smell (maybe rubber) within about 10 minutes of running the car. I’d been worrying about the automatic transmission as it had seemed to be late in shifting down while stopping for a red light. Finally today it seemed worse than ever and I popped the hood to discover a faint trace of smoke apparently coming out from under the top engine cover. Help! What would you suppose I’m dealing with here? Thanks so much.

We would assume that the smell you have been noticing is hot oil, and that the smoke that you saw was from this same hot oil.  You likely have an oil leak and the leaking oil is contacting a hot engine part.  Common oil leakage areas for the M54 6-cylinder engine in your E46 model (3-series 99-05) are valve cover gaskets and the oil filter housing to engine block gasket.  Additionally, there is the possibility that the Crankcase Ventilation System is leaking the oil.  Some inspection will be in order to determine where the source of the leakage is (as well as verifying that it is indeed an oil leak).

See these blog posts for additional info:

Oil Smell & Smoke

M54 oil filter housing leak


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