A lot of people were surprised when BMW got into the SUV business. With the X5, its first sport utility product, BMW demonstrated all the attributes people love about sport utility vehicles could be incorporated into one that drove the way a BMW was expected to. Thus, when BMW followed the X5 with the X3 in 2004, expectations were high. Just as the X5 had been based on BMWs extraordinary 5 Series sedan, the X3 was based on BMWs 3 Series sedan, which is widely respected as the benchmark of compact sport sedans.
Unfortunately, for many reviewers the X3 was initially a disappointment. Many complained its ride was too harsh, its interior was too ordinary, its off-road capability was zero, and its styling was somewhat bland. Still though, the model was a BMW product, and people bought it. In fact, the X3 was successful enough to convince BMW’s competitors a smaller premium on-road SUV would sell.
BMWs X3 product team was listening to the complaints though, and over time, all of the flaws in that first X3 were corrected. In fact, the first generation BMW X3 was the first model in the company's history to receive a cosmetic update of some sort every year.