Getting the Horn to Work
Getting the horn button to work requires some modifications.
In a nutshell, this is how the horn button works on an '02. On the steering
column, a thin sheetmetal brass ring (technically called a slip ring) is
electrically connected to the coil of the horn relay. On the
steering wheel, a small spring-loaded carbon (or brass) plunger is
connected to the horn button. If everything works correctly,
the spring plunger is always in contact with the brass ring as you turn the
steering wheel. When you push the horn button, the circuit is closed to
the relay and the horn goes off.
On a 320i, the mechanical hardware for the horn button is reversed. The
plunger is on the steering column, and the brass ring is on the steering wheel.
Don't ask me why the BMW engineers did it this way. They just did.
 Detail of what's behind the scenes.
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You have two options. One: Take a sharp
utility knife, and make a radial cut completely through the brass ring on
the 320i steering wheel. Once the ring is split, use pliers to carefully
bend up one end of the ring high enough to form a cantilever
leaf spring. Then bend the tip of the ring over to form a smooth contact
surface for the steering column.
This method works well with the standard 4-spoke 320i steering wheel
because
there is little, if any, access to the internal wires going to the horn
buttons. It can be used for the 320is steering wheel, too.
Two (for the 320is steering wheel): Remove
the brass ring. Carefully enlarge
one of the three holes on the base of the steering wheel hub just large
enough to press fit the spring plunger into it. (Note: For the particular
plunger I had, a 17/64-inch diameter hole was needed). Surprisingly, the
location of the hole pattern is almost on the center of the slip ring on
the steering column. Before you install the plunger into the 320is
steering wheel, you may need to lengthen the wire.