BMW didn't make an E46-era 3 Series M3 Touring, but if it had, it would have looked pretty much like this.

We're not guessing at that, by the way. BMW revealed a design concept it had produced in 2000, and it looked precisely like this, but it didn't put the idea into production.

A quarter of a century on, however, it has become the chosen basis for what you see here. What to call it? Not quite a restomod - it's mechanically an M3, just in a bodystyle BMW never made. It is as if BMW had built an M3 Touring and had it restored to original condition.

Anyway, it's the product of Petroyle Restorations, an Oxfordshire restorer that does extremely good work. And it's quite a simple idea.

First, take a BMW E46 3 Series Touring shell. It can be any model, but a tidy one helps. Petroyle founder Gregg Alvarez says there are plenty around, and they can either be very good or quite bad.

Next, find an M3 that is mechanically sound and whose body condition doesn't matter – there are plenty of tatty Cabriolets, for example, which fit that bill; the mechanicals are often better than the bodywork. Then marry the oily bits from the M3 into the body of the estate. Job done.

There's a bit more to it than that, of course. Touring bodies had in the boot floor a spare wheel well which doesn't allow clearance for the exhaust system of the M car's 3.2-litre straight-six engine. So that has to be cut out, and a carbonfibre panel is inserted.

Ditto the wings of, say, a 318d, which don't allow room for an M3's 18in wheels or track. Front wings on Tourings are shorter than on the coupe/convertible, too, so these are made in carbonfibre. Likewise a rear bumper and side sills. And if you want a carbonfibre front bumper and roof, Petroyle will do those for you.

The rear quarter panel, though, sculpted around the wheel arch to match BMW's original, remains steel and is shaped and welded into place as part of a much larger panel. The rear doors remain the same as standard too, because that's how BMW treated the concept – it decided against melding the rear wheel-arch sculpting into the door, which would have necessitated new tooling.

Then it's a case of removing the drivetrain and running gear of the M3 and inserting it into the Touring bodyshell, although again there is a little more to it than that - it would take me about eight years and I'd still end up with a host of permanently illuminated warning lights, but for professionals it's not so hard.

Things are given a makeover as they need on the way, and a common E46 issue where the rear axle carrier panel can crack is addressed (kits are available for these); usefully, it helps stiffen the shell a bit, too. But the result is very similar to how BMW would have made it had it done so at the time.

Alas it did not, but there will be 50 of these Petroyle Tourings, and I suspect Alvarez will have more orders than vehicles, not least because a starting price for the Touring is £130,000. (Other BMW-based projects, it should be noted, will come down the line in time.)

So sure, that's a lot for a car that's mechanically identical to a 25-year-old M3, but by a lot of restomod standards £130k is buttons. This just happens to be a very neat idea put into small-series production.

I ran an E46 at the start of the year so I know well how much I like the interior and overall size of a this-era car. Petroyle will either retrim the inside or find a nice existing one as customers prefer; this demo car has had some nice work done.

The driving position's great and visibility is good, as it often was on cars of this era, and it just feels a bit more compact and usable than many modern performance cars. And yet it doesn't feel like an old performance car, if you follow. An E46 today is completely usable.

What's it like, then? Much as you would expect, and hope, it drives like a BMW M3 Touring should. Petroyle fits new springs and dampers, and the Touring mooches down a road with composure, compliance and hints of its purpose.

The steering is weighty and slower than you'd expect in a modern electrically assisted car, but they need that in big, new heavy cars to make them feel more agile. The Touring weighs 1570kg and is 1780mm wide across the body, so it doesn't have to act agile, but it's thoroughly easy to place and easily responsive, with a great balance.

The drivetrain is terrific, too. This example has more than 100,000 miles on it, but you wouldn't know it. In our turbo, multi-clutch automatic era there is a bit of throwback feel to driving a naturally aspirated car that spins to nearly 8000rpm and makes 'only' 338bhp when you get there, but it's worth the effort.

Petroyle has added some polybushing to the gear linkage to help tighten that up (BMW's shifts can be a bit rubbery), and it's extremely satisfying to get the changes right, to let the engine sing out and to make what is by the latest standards modest- looking and modest-sounding progress.

So you have to work the engine to 5000rpm before you're greeted with a mere 269lb ft? One, that's part of the fun. And, two, it's not like 0-62mph in 5.2sec was ever slow, right? This car is great to drive.

It's also E46 Touring-practical. The rear seats could take adults, the boot is 435 litres and it retains that lift-up rear window that's handy for dropping bags in or not letting the dogs out.

I sometimes wonder what would be the ideal money-no-object daily driver: a Range Rover, a Mk7 Volkswagen Golf R with no badges, maybe a quick Audi of some kind? Today, actually I think it's one of these.