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The 35i has hydraulic steering, same as the 28i, it's the sDrive that has electronic. Gas mileage is not stellar. Not E9x M3 bad, but the 28i is probably a better fit since you already have the M3. My wife just preferred the extra power of the 35i and being a manual driver, I prefer the feel of the 6s auto to the always shifting 8s, even though it is a great transmission, especially paired with the N20.
As for space, it's great for us, I'm 6'2", but my wife is 5'3". Unlike Atomic, I can fit behind myself without any issue and behind my wife, I could probably fit a carry on bag in front of my feet, it's worth noting that you can recline the rear seats too. The hatch area is actually my only complaint about space, it's not very roomy, but then the X1 isn't a large car, so that's not too surprising.
Compared to my friends E91 which the E84 is based on, there's more rear seat room and less area behind the rear seats.
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