Yes, the W203 outsold the E46 in the early 2000's. However, that success did not last long, as people moved towards the sportier 3 series starting in the mid 2000's, and especially when the E90 made its debut. At that time, the new IS and revised B7 A4 also came, instantly making the W203 the least attractive choice for many people simply because it looked (and was) the oldest car in its segment.