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BMW's have longitudinally mounted transmissions for a RWD setup. A transfer case at the back of the transmission houses a clutch, gear train and a cam actuator with two forks that engage a ball-ramp mechanism to engage the clutch. The clutch will then engage the tail shaft (input) to the front wheel gear train (output) to enable AWD.
To control the cam actuator, a calibrated electric motor mounted to the transmission casing is used. This allows dynamic engagement of BMW's AWD system, varying the torque from front to rear. The ultimate torque split is determined by the gear ratio setup and the amount that the clutch has been applied. X-Drive vehicles do not use a center differential and instead rely on the slippage in the clutch to prevent binding between the front and rear wheels.
The manual transmission in this video was from a 2011 BMW 3 series E90. BMW X-drive transfer cases for FWD transversely made vehicles (such as the 1 series and X1 SUV) will have a different configuration.
Here are a view videos on how AWD systems work:
Jeep 4x4 4WD:
Subaru Symmetrical AWD:
Audi Quattro AWD:
Acura SH-AWD:
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