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323iT - 323Cic
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I have yet to find the armrest in the way with a manual transmission. (8 years of driving a manual E46.) I can't imagine driving one of these cars without it, personally. We'll see if that changes with the BMW Performance shift lever.
The arm rest is a bit annoying with the 540i Shift Lever in my wagon, the stock lever in my 323Cic is fine with the arm rest though.
 
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