Strange OVERcooling problem !

[ah]

To start my 320i has never run up to temperature ie quarter on the temp gauge, but lately when I stop and turn off the engine for a few minutes and restart the engine, the temp gauge starts at between nothing and again quarter after a while it goes to a quarter again. Yes I changed the thermostat about a year ago.My question is,is the engine running up to temp but the gauge is not reading right, or is the engine not running up to temp.Also if it's not running at the right temp will it effect the performance of the engine.

[jmc330i]

M20s usually run at the 1/4 mark iirc, so it sounds about right. M40s are around the 1/2 mark. But it obviously depends on the thermostat fitted.