Thoughts on why E46 M3 had an SMG but the E39 M5 did not?

[The HACK]

The answer is simple guys. It's all about production numbers and how many they expect to sell.

At the planned production number for the E39 M5, they would have sold every single one of them no matter what transmission was in it. The E46 M3 has a much higher projected production number, and if they couldn't put a transmission that more than 1/2 of their customers can drive, they'll have M3s sitting on the lot unsold that they can't give away by year 2 of production. Same reason why BMW put an automatic version in the E36 M3, and EVERY ONE of those automatic M3s sold off the lot.

Back in the early 2000s when both E39 M5 and E46 M3s were on sale, less than 20% of all US drivers can "operate" a car with 3 pedals, and even back then US took up nearly 50% of BMW sales. If they didn't offer SMG on the M3 they would have missed out on a huge chunk of sales.