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I drove both the 2012 528i and 535i as well and noticed a big difference. In my opinion, the N20 engine fits the new 3 series much better than the 5 series. On a marketing point of view, I think it is smart for BMW to offer a small engine for the 5 series. There is a growing market in the US for cars with an economical engine, it also helps BMW to comply with the upcoming CAFE requirements.
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