The radio module is in the trunk, between the CD changer and tail light in the E39 5 Series. It is a nondescript, square silver box about 8" x 8" x 2". If you remove the gray felt trunk cover that hids your electronics (nav computer, amp, CD changer, etc.), you will find it.

It is not the norm to have a MKIII nav in a 1997 E39. So, did you do the upgrade or buy the car that way? And, if you did the upgrade, did the radio work before the upgrade? Have you ever heard the radio work?

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2000 E38 750iL Highline Edition, Upgraded with the lastest 2006 X5 Electronics
MKIV Navigation, 16:9 Display, Bluetooth, TV/Video with Backup Camera, Sirius, and Aux Input