I'll say they're badges for looks only..I have not run across an M series available for that yr/model..

 

Uhh, there was never an M328e. Period. Why would they make an M car with an economy tuned engine? But no, there was never such a model. Especially not E28. Only M cars from E28 year were the M535i and M5 (later).

 

The "e" in the 528e designation is for 'eta'. These are the more fuel efficient engines available for that time period. As for the "M" badges, the "M" is for BMW M GmbH. the "Motorsport" part of the company that turns out the M3, M5, M Roadster and Coupe and I believe some of the sport package equipment on many models. The only ones that get the "M" external badging from the factory are the highest performance true "M" cars. Cars with 'sport' packages may have "M" emblems on the steering wheel, shifter or other small interior parts.

Recently it has become popular for some in the Japanese Import street scene to slap BMW or "M" badges on Hondas/Toyota/Nissan or whatever, but it's all just :bs