I would say the exterior M badge would be okay if you had a tune done to the motor and were putting out more power than the average 335i. The M Sport line does have some nice cosmetic additions that the other lines don't but performance wise it is a similar deal.
I have a M sport myself as I think the car looks better with this trim and I love the thick steering wheel and hex aluminum trim and the EB2 colour. But I wouldn't put an M badge on the exterior unless it came that way from BMW. Too much a poseur! Your Melbourne Red looks striking and the black kidney grills really work.
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