I have always assumed the BMW vehicle naming conventions represented the engine size, e.g. a BMW 118d suggests it's a 1 series model with a 1.8 litre diesel engine and similarly a 320i suggests it's a 3 series model with a 2.0 litre petrol engine.
But then they throw a 123d into the mix and the pattern doesn't quite follow. What does the 123 mean? Is it related to BHP? Twin turbo?
Can anyone shed some light onto this or provide a list of engine sizes and their meanings?
Historically the numbers used to indicate the displacement of the engine, exactly as you describe in the question. As the engine technology has moved more away from being naturally-aspirated petrols across the range the numbers became more of a suggestion of the "equivalent" performace that the engine provided. This is really only an approximation - the rule of thumb that the higher the two numbers the more powerful the engine is really what you need to bear in mind.
To use your examples a 118d is actually a 2.0 turbocharged diesel engine, the 120d is the same engine mapped to produce more power and a 123d is a 2.0 diesel with twin turbochargers.
"i" is indicating that it is a petrol engine, "d" is diesel.
