Dan, I'm going to stick to my guns and say that the M40 was never a US engine, but was widely used in European E30's, E34's and E36's, whereas E34 in the US never had a 1.8L (thank God) and the US E36's had the M44.
Dan, whatever you read, the M40 was never here in North America. BMW made the 318i with the M10 until '85, and all 318"i" & "is" models after 1989, until 1992, had the M42, all with manual trannies. If the M40 was the predicessor to the M42, what model/year was it in here in the US/Canada? The M43 was also a SOHC junker that was only in Euro cars, based on the M40.