The axle ratio on my '88 five speed is 3.27:1 and I don't think this changed as the years went by.

The 2.6 is a torque shy, peaky engine, and the widely spaced gear ratios are not well suited to it. Also, the overall gearing is too tall. For example, third gear is good for almost 100 MPH. On a 325i third is good for about 85 MPH due to it's shorter overall gearing, and the 325i has closer spaced gearing.

The 2-3 spread of 1.58 is particularly bad. At almost any speed - even when shifting at max revs - it falls on it's face on the 2-3 shift. Top speed is achieved in fourth gear. Shifting to fifth does not increase speed, and it may even slow slightly. Also, fifth gear grade climbing ability is poor. Climbing a freeway mountain grade of more than about three percent requires fourth gear to maintain speed. Mercedes should have shorted the axle ratio by at least 10 percent to give better performance.

The contemporaneous 300SE has a 3.46:1 axle. and this would have been an improvement, but I would have also shortened first and second to keep the overall first and second gearing about the same, which would allow a closer 2-3 spacing.

I once considered installing a direct drive 16V gearbox and the Euro model 3.07:1 limited slip axle. My preliminary research indicated it's a bolt-on operation (would also have to include the longer 16V driveshaft), but I decided the time and expense was not worth the effort.

Duke