Have the cooling system pressure tested for leaks, you do have one somewhere.
Most european cars have an aluminium heater matrix. This can clog up and no amount of flushing and additives will clear it.
The only solution is replacement. This can happen in 4-5 years or 75-80 thousand miles from new. Particularly if the system has been run on just water at any time. They also have a habit of leaking into the footwells and a check of the carpet area either side of the heater for dampness will atest. Another clue to water loss is a sweet smell when the blower is on and an film of moisture on the screen.
Have the system pressure tested and all should be revealed. Make sure the heater is fully bled of air on refilling. Some cars are a *****.
SOURCE: leaking coolant from behind engine on 96 BMW 318i sedan
have someone check out the intake gaskets also check the heater hoses coming from the heater core
SOURCE: battery or radiator light on a 1999 BMW 318i SE
The below is taken from another site written a year ago:
What you are looking at is the Service Indicator. The green, yellow and red lights let you know when service needs to be performed. The green lights mean everything is still good. The yellow lights mean "anytime you're ready." The red lights mean do the service ASAP. There are also two other lighted areas. One says "inspection," the other says "oil change" (or oil service.) An oil change is an oil change. However, there are two inspections: Inspection 1 is normally at every other 15,000 miles; Inspections 2 is at every 30,000 miles. Your local BMW dealer should have a pamphlet listing all duties performed for each of the services. Inspection 2 can run you around $400-$800 depending on the service station/dealership's labor rates. Inspections 1 should be around 1/2 of that. You should have your oil changed about every 5000 miles. Dealership oil changes can range from $35-$65. A BMW that is well taken care of will last a long time.
FYI, don't be surprised if the SI (service indicator) board decides to **** out one day. I'm surprised to see yours is still working (they usually die within 10 years unless someone went thru the expense to have it replaced.) If/when it does go, just gauge your services by the mileage intervals I've listed above. I'd also recommend when you stop into (or just call) the dealership, go to the parts department and order an owner's manual for your BMW. Should be less than $20 and get to you in about a week unless they have one in stock.
When the service tech has performed the necessary service(s), he will reset your SI board so that only green lights are showing.
SOURCE: Need Fuse Map Diagram BMW 318i 1993
check the internet for a bmw e36 ETM ( electronic troubleshooting manual) everything you need is there.
SOURCE: Where is the coolant temperatue located on a BMW
The engine coolant temp sensor is in the cyl head that tells the computer the engine temp.
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