A new version of one of the world's best-selling high-performance car is preparing for action. The very first spy photos of the all-new BMW M3 Coupe were revealed only one week ago. And now, the car was caught  testing at the German Nurburgring and the saloon in northern Sweden.

The next-generation M3 is the first V8-engined 3-Series, and offers 400 bhp - so expect it to race from 0-60 mph in a fraction over five seconds, and go on to a limited top speed of 155 mph. Power will be fed to the rear wheels via a six speed manual gearbox or the latest SMG sequential manual, possibly with seven ratios.

The new car should maintain the M3's reputation for outstanding handling. The V8 will be more compact than the current in-line six cylinder model, while a longer wheelbase will help with weight distribution. Externally, the car takes many cues from the M5, with twin-exit exhausts, front wing vents and discreet 'M' badges, while the look of the all-new 3-Series means an aggressive nose and deeply sculpted flanks.

Expect to see the M3 in showrooms at the end of 2006. It will come in saloon, coupe, cabrio and estate guise.