My '04 X3 2.5 started getting terrible mileage (15-16 city, 19-21 highway)...the dealer said everything was fine. With some research I found some posts regarding the seals in the Vanos unit. Well I did the seals and Voila, the car is getting good gas mileage again (19-21 city, 24-29 highway)!

The Vanos seal issue was resolved in the latest engine redesign ('06?) but was in all the dual vanos engines berfore then.

Steve