I can see both sides to the 1M argument although I'm in the true M camp on that one.
It was built by M as an official M model so it should be considered a "real" M. But it's also true that the 1M was built using a combination of existing, repurposed parts rather than the full purpose built hardware treatment.
That being said, it was a brand new model at the time with no predecessor so it's R&D probably made the most sense. Also, wouldnt be the first time BMW shared components cross platform. It was a unique performance model in it's own right, not just a reskin like (for example) the mk5 Supra
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