Paint issue - what is this?
 

Mine is doing the same thing. It is a common problem with the edges on early X5's for some reason. Not sure if BMW went too light with the paint or if it is because the paint was environmentally friendly or something. I think what you are seeing is the original primer under the paint.

I Believe under the hood there should be a sticker that identifies the original Paint for the vehicle, i believe its towards the front passenger side. To me though the grey looks like metal? as in the area wasent painted well. or maybe some wax residue? does the area feel wierd? bumppy smooth?

Here is a link to another thread regarding this issue...

http://www.xoutpost.com/bmw-sav-foru...eling-off.html

and another...

http://www.xoutpost.com/bmw-sav-foru...ease-help.html

I have the exact same issue on my 2001 X..

And i have seen it on another 01 X..

It's the primer showing...

This is a known issue. I had mine fixed. It did require regional rep to approve but it's a known issue per the regional rep when I spoke with him.

Dunno how well it may with BMWNA bode now that E53 had come and gone, E70 is now in mid-cycle.

I have the same issue with ALL edges of mine!!!http://www.xoutpost.com/images/icons/icon8.gif. I will call the dealership and ask what the warranty is on these. I also did a little research on the paint type and it does appear that they did switch to some green shitty process about this time. So how green is it to have to re-paint something twice???? unintended consequences every time they try do something like this.

If left alone, will this spread? like a virus:D

I have encountered this quite a lot on E53 X5's until the year 2003. I havent seen it much for the 2004s and on. A qualified body shop should be able to fix that for your quite easily.