Headliner sag is endemic on E36 M3s, particularly around the sunroof and B-pillars, driven by failed adhesive on the foam-backed cloth; OEM-quality replacement (often with Alcantara) runs $400-$1,100 and is highly recommended for any serious example.
Headliner sag, especially around sunroof
BMW E36 M3 (US-market, 1995-1999) · interior