Honestly I'm not sure it would be an upgrade but you wouldn't really be sacraficing much. My friend has a slightly modded M3: headers, exhaust, intake, lowered, sway bars, body kit.
Against my NISMO which only has a FI CBE (which is only about a gain of 10whp over a stock NISMO) we are neck and neck. From a dig it's all about who gets the better launch. From a roll we are litterally right next to eachother the entire way. Auto-x is the only time I see a difference. Now it could be his driving skill but he is no newb to cars. Typically when we auto-x I post a 1-2 sec better time than him. Having driven his car I would say the Z is easier to turn in and at it's limit the Z is more predictable.
The M3 is a very nice car and your car in particular looked very nice. I would say a NISMO won't leave you dissapointed but it won't really be an upgrade either. I think the E46 and 370z are very similar in that mod for mod they will perform similarlly.
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