BMW has finally lifted the lid on its latest M3 Coupé.

The new 4.0-litre V8 engine develops a massive 420bhp at a whopping 8300rpm and 62mph can be reached in 4.8 seconds. Power is transferred to the road by a six-speed manual gearbox and variable differential, which means up to 100 per cent of available power can be transferred to the single wheel with most grip.

Despite the power hike, BMW says fuel economy is up 8% on the old model at 22.8mpg thanks to a combo of ultra lightweight materials and brake energy regeneration technology.

Like the larger BMW M5 and M6 models, the new M3 Coupé also features an MDrive button that brings together the customisable functions of the car and the iDrive menu system – incomprehensible to many but utter genius for most.

On the outside, The new M3 shares most of its design and components with the standard 3 Series Coupé even though only the doors, bootlid, windows and lights are carried over. A "powerdome" and twin air intakes in the aluminium bonnet sit above the hot V8, which also needs nice big air ducts at the front. 18in double-spoke light-alloy wheels are standard, while even the wing mirrors get smoothed to aid aerodynamics and provide downforce.

The car goes on sale in September 2007 with prices announced later.