Yes, of course it's a front motor ! Fly always put the engine where it is on the 1:1 car !
In fact, the ETCC BMW 320i uses the same chassis as the M3 GTR. The body has been modified accordingly (new front spoiler, no holes any more in the front bonnet, narrower wings, ... and a new driver seat and seatbelts).
The motor bears a blue FLY sticker, probably meaning a racing motor.