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http://www.vacmotorsports.com/blog/335i-and-135i-differential-faq-no-lsd-really/

Shortly after the N54 powered 335i and 135i were released, enthusiasts and tuners wanted to ‘fix’ the lack of limited slip differential.  Making easy and abundant power was simple with the twin turbo inline 6, but putting it to the ground was not.

Enter the infamous final drive.  Open, LSD, welded, bolted, large body, small body, 3.08, 3.46 etc etc.  We will try to make sense of everything with this blog entry.

Open vs. LSD:
The 335i and 135i were not offered with a limited slip differential.  Yes, BMW sold a twin turbo, 6MT sporty car without a LSD.  No factory option, nothing.  So, owners had to rely on the aftermarket for a solution.  Initially the solution was pretty simply, till BMW switched things up on us.

Welded vs. Bolted:
Very early 6MT equipped cars had a traditional ‘bolted’ setup where the ring gear was bolted to the gear carrier.  Shortly after, the engineers in Munich decided to weld, not bolt the ring gear to the gear carrier.  Well, that complicates matters a bit!

Does your car have a welded or bolted differential??
See this chart.  As you can see, the majority of 335i and 135i owners are blessed with the welded differential.  This makes adding a LSD a bit challenging, as the ring gear must be separated from the carrier carefully to ensure it can be re-used.  Very few shops can do this properly and consistently, but we pioneered the best way of performing this operation which allowed us to add a Quaife ATB etc. with no problems.

Large or small differential?
There are 2 differential (housing or ‘pumpkin’) sizes.  The table above shows which cars have which size.  So, a Quaife ATB limited slip unit designed for the 6MT large housing will not work in your 2009 335i automatic.  Fortunately, we have Quaife ATB, Wavetrac and OS Giken solutions for both the large and small differentials in stock at all times.  Here are some pics so you can see the dramatic difference:

Gear Ratios:
See this chart.  All 6MT cars were equipped with 3.08 final drive ratios.  Automatic cars had 3.46 ratios.  Note:  we have built a few 3.46 differentials for 6MT cars and the owners were thrilled.  They were willing to sacrifice top speed for an incredible power band around town   Lastly, DCT equipped cars have 2.56 and diesel cars have 2.81 final drive ratios.

Conclusion:
When you modify your N54 or N55 powered E9X or E8X, a proper differential is an essential modification if you want to put all of that power to the ground.  While it is quite confusing, I hope this entry makes it a bit easier to understand.  We have built 100s of differentials, so you can rely on our sales staff to answer any other questions you may have!