Wilkommen, meinen Damen und Herren, to the Deadly Sins of the German car industry. Why “Bayern Cycle”? Because this trilogy, or Wagnerian importance and length, revolves around Bavaria – even though we will be making a stopover in northern Germany along the way. Contrary to custom, we shall focus today on a Deadly Sin that did not sink the company – but brought it so close to the grave that it’s as if BMW was resuscitated in the ER by Dr Quandt and a flat-twin-powered defibrillator. Get me 700ccs of historical context, stat!
Initially focused on aero engines and motorcycles, the Bavarian Motor Works was a merger of two Bavarian companies (Rapp and Bayerische Flugzeugwerke) and a Thuringian one (Fahrzeugfabrik Eisenach) in 1922. Six years later, BMW bought Dixi, who made Austin Sevens under license – BMW had entered the car business. By the late ‘30s; BMW cars had become stylish, comfortable and sporty. The company’s 2-litre hemi 6-cyl. engine was widely admired, and BMW launched the 335 – an ambitious 3.5 litre model – in 1938.
The Second World War put a stop to car production, which was coming out of the Eisenach factory. BMW lay in ruins by 1945, like most of Germany, but their case was to prove even more complex than other industries. The Bavarian factories were gutted by the British, French and Americans. BMW were not allowed to resume piston and jet aircraft engine production. British pre-war importer Frazer-Nash got the blueprints for the 2-litre six and made a deal with Bristol to get the engines produced in the UK.
Motorcycle production restarted timidly in Munich circa 1948. yet car production had started even by late 1945 – in Eisenach. Therein lay the problem: there were two BMWs, one under Western control in Bavaria and another under Soviet control in Thuringia. The Russians were as keen as anyone to drive new BMWs, so the pre-war 321 came back online. It soon dawned on the Soviets that they had an effective export on their hands: by 1948, BMW Eisenach were sending batches of 321s to places like Switzerland or Belgium, earning precious foreign currency for the USSR. More BMW 321s were produced after the war than before it.
The 321 was superseded by the 340, a restyled version, in 1950. The BMW 340 became the standard East German taxi and police car, as well as the apparatchik’s limo and, in wagon form, the ambulance of the GDR in the ‘50s. The pre-war 327 coupé and convertible was also back in production (mostly for export), with coachwork by the former Gläser works in Dresden. It seemed like BMWs had become Eastern Bloc cars for good: Eisenach even projected to make a larger limousine, the 343 (which thankfully never went beyond the prototype stage).
But the Bavarian side of the business wasn’t going to take it lying down. They were planning a post-war model of their own, based on the stillborn 1940 BMW 337, though the company hesitated to produce a small 600cc saloon as well. But two BMW ranges – even separated by the Iron Curtain – would be impossible to sustain and confuse the clientele. The cars would still be blood relatives: the new (Bavarian-made) BMW 501 had the same 2-litre 6-cyl. as its East German cousin. The two BMWs went to court, which decided in Munich’s favour in 1950: the Eisenach cars thus became EMWs (Eisenacher Motorenwerk) circa 1951 and their version of the BMW logo would sport red instead of blue. This situation continued until 1955, when the GDR authorities decided to abandon the EMW line and marque in favour of a completely new car, the Wartburg.
Having addressed this Cold War doppelgänger situation, BMW-Munich introduced its 501 “Baroque Angel” in 1951. One thing was evident: no matter how brilliant, the pre-war 65 hp six was not ideally suited to this heavy new body, designed by BMW’s in-house stylist Peter Schimanowski.
PininFarina had been asked for a design proposal back in 1951, when the 501 was getting ready for production. Was it pride or deep-seated Bavarian conservatism that pushed BMW to favour their in-house style over the patently far more modern and stylish Italian design? Some say the BMW top brass thought the Italian design looked too much like the new Alfa Romeo 1900. In any case, BMW were now stuck with the bloated Angel, its rapidly ageing separate fenders and bulbous behind. Body production, initially contracted to Baur, was shifted to BMW’s Milbertshofen plant by late 1952.
Sales were pretty muted – and Mercedes-Benz weren’t looking worried. But BMW were flush with Marshall Plan money and saw the 501 as a transition model towards a more ambitious V8-powered car. The new engine was to be of modest displacement (2.6 litres), but as refined as Munich could make it, with the option of larger versions in the future.
In 1954, BMW launched the 502 – essentially the same car, but with a V8 and more chrome. There were not many 8-cyl. cars in European ranges at the time. The French Ford/Simca Vedette was the only one in series production; the Spanish Pegaso, the Fiat 8V, the Chrysler-powered Facel-Vega and the exclusive straight-8 Rolls-Royce Phantom IV were all made in very small quantities (and for very different segments). From a technical standpoint, the 502 was as modern as they came: the all-aluminum 100 hp engine sat in the 501’s sophisticated chassis, with its torsion bar suspension and gearbox placed under the front seats, which made for better weight distribution and improved front legroom.
On the home front, BMWs competed with arch-rival Mercedes-Benz and their new 220a (W180), as well as the Borgward 2400 and the much cheaper Opel Kapitän. The issue for BMW was that their car, which wasn’t that old, looked like it was from a different decade compared to the competition. The 6-cyl. 501 saw its price reduced and remained a steady seller alongside the V8 cars, which were off to a slow start sales-wise.
One way to remedy the conflict between the car’s great mechanicals and its old-fashioned body was to sell the car as a chassis for the handful of coachbuilders that still existed in Germany and abroad. Chief among this small group was Autenrieth, who designed and built a number of specials on the 502 chassis throughout the ‘50s and into the early ‘60s.
Autenrieth’s clientele favoured two-door designs, but a few ordered four-door specials, such as this 1958 limousine and this 1962 4-door cabriolet used by Algerian president Ahmed Ben Bella. The price of these bespoke cars was pretty astronomical though, so only a handful of each style were made (if that). Other German coachbuilders also tried their hand at making bespoke BMWs, sometimes with pleasant results: Baur made a number of 502 coupés and convertibles, as well as a splendid roadster that may have inspired the BMW 507.
Swiss coachbuilders Worblaufen (top row) and Beutler (bottom) also practised their art on the BMW V8 chassis. The mix of German and Italian influences made for some very appealing results.
The first big V8-powered dud was the 505 limousine. BMW eyed Mercedes-Benz’s 300 “Adenauer” with envy: not only the West German chancellor, but many other VIPs were ordering the stately Benz in the mid-‘50s. In 1955, Swiss coachbuilder Ghia-Aigle was contracted to design and build a couple of prototypes, which were exposed at various motor shows to gauge interest.
The legend is that Adenauer sat in it once but knocked his hat off when exiting the car, which caused much embarrassment to BMW. One of the 505s ended up with the Bavarian State government, but Adenauer stuck to his beloved Benzes and nobody felt the urge to order this particular model.
Financially, BMW were starting to feel the pinch. The 501 and 502 were produced in such low numbers that economies of scale were impossible. The flowing lines of the car were expensive and time-consuming to make, too: the front wings alone required three pressings. Prices went up all the time, but profits remained elusive – BMW cars were sold at a loss of about DM4500 per unit (more than the cost of a Beetle); the 501/502 programme was DM76m in the red by 1956. The 6-cyl. range got the axe in 1958, which reduced production costs but hurt sales. Still, strong motorcycle sales made up for the car branch’s losses, at least for now.
Desperate to increase production, BMW licensed the Isetta from Italy and began competing for the lower end of the market. It was also a great way to increase motorcycle engine production (the Isetta came with a 1-cyl. 250cc or 300cc BMW 4-stroke engine). The BMW Isetta’s success was ephemeral though, as economic conditions dramatically improved in Europe at large and in Germany in particular – and the bubble car market was bursting at the seams with competitors.
In 1957, BMW launched the 600, a four-seater version of the Isetta, to try and follow their upwardly mobile clientele, but the competition from the likes of VW, Lloyd, NSU-Fiat or DKW in that segment of the market was fierce. The 600 bombed and production ceased in 1959 with only 34,318 units made – compared to the 136,367 Isettas made from 1955 to 1962. The Isetta and the 600 were too weird to be widely acceptable and their profit margins were very thin.
BMW were well aware that their V8 was still a bit underpowered and that their big flowing saloon looked increasingly outdated. The answer was to augment the V8 to 3.2 litres and 140 hp – a welcome improvement – and propose a more modern-looking model. The 503 coupé / cabriolet was born in 1956.
It was hailed as a solid, stylish and rapid car by the motoring press, but was not a sales success. The market only had eyes for Mercedes-Benzes and British roadsters. BMW were becoming irrelevant. Export sales were not excited by the 503 either, which was too well-behaved, too clean-shaven, too staid and, at DM30,000, horrendously expensive.
By the late ‘50s, dark clouds were gathering over Munich. The ailing firm finally threw a last roll of the dice as regards its V8 platform: a truly superb effort, the 507 roadster. The model was aimed at the American market and made at the behest of BMW’s US importer, Max Hoffman; for the first time, a BMW debuted at the New York Motor Show. Styled by Albrecht Goertz (who also had a hand in the 503), the 507 was Munich’s belated answer to Stuttgart’s glorious 300 SL.
Beautiful as it was, the BMW 507 fell victim to its maker’s atrophied dealer network and dwindling reputation, as well as its high price – close to its more established rival, the 300 SL. Only 253 were made in three years. The larger 503 managed 412 units in four years. Both cars were unmitigated flops.
The 503 and 507 did inspire a few coachbuilders to create some interesting designs: Jacobsen & Steinberg of Berlin made an interesting fiberglass 503 convertible (top left); Ghia-Aigle just redesigned the 503’s grille (bottom left); mustachioed Raymond Loewy designed a bizarre mustachioed 507 coupé, bodied in France by Pichon & Parat in 1959 (top right); that same year, BMW exhibited this 507 coupé by Vignale at the Turin Motor Show.
The BMW V8 found its way across the Rhine in a strange way in the late ’50s. Though in terminal decline, French firm Talbot-Lago asked BMW for a few engines, as they were unable to continue making their own designs any longer. The Talbot-Lago America, launched in late 1957, sported a specially-made 2476cc version of the BMW engine, good for 95 hp. This kept the Talbot within a reasonable tax band on the French market. However, only 12 cars were ever made until Talbot were bought by Simca in 1959. BMW probably never got paid for those V8s…
Both the 503 and 507 went out of production by 1959, at which point the automotive press knew that BMW were in distress. The range made little sense (flat-twin microcars and V8 supercars) and rumours about the marque’s demise, at least as far as cars were concerned, were in wide circulation. Daimler-Benz were smelling blood, and a takeover bid was proposed.
The events of December 1959 can be seen as historic for the automotive world: but for the determination of one man, BMW would probably have disappeared around that date. The BMW board called for a shareholders’ meeting in Munich to discuss the Daimler-Benz deal. Things were as grim as could be: the Bavarian State was unwilling to guarantee additional loans and most shareholders saw Stuttgart’s offer as the only way to salvage their investment. The V8 cars had been an expensive failure; the small cars weren’t selling any longer – even the motorcycle range was in trouble: only 5000 were made in 1958, compared to over 30,000 in 1954. There was one ray of hope: the new 700.
The BMW 700 was cobbled together in desperate times, but by folks who knew their stuff. The car had been developed semi-independently in Austria by Denzel, who put together a very convincing and modern rear-engined proposal, the first monocoque BMW ever made. The air-cooled BMW flat-twin was still one of the best power plants of its kind – all it needed was a decent chassis and a good-looking body (penned by Michelotti). The 700 coupé and saloon were exhibited at the 1959 Frankfurt Motor Show and unanimously hailed as a sensational coup from the beleaguered Bavarian brand. Orders poured in and BMW found they had a smash hit on their hands. But was it already too late?
Herbert Quandt certainly didn’t think so. Over the years, he had become one of BMW’s most important single shareholders: his family controlled 30% of the shares. During the December 1959 meeting, Quandt initially wavered – he also owned 10% of Daimler-Benz, so there was some attraction towards making a deal from his point of view. The numbers presented by the board looked terrible and Deutsche Bank, who had a seat the board of both BMW and Daimler-Benz, pushed hard for the takeover. A group of shareholders, BMW dealers and unions demanded a recess, during which they made a quick private audit of the books as presented by the BMW board. These did not stand up to close scrutiny: the board was accused of making BMW’s books look worse than they really were to force the Daimler deal on BMW shareholders and workers.
The board had to recuse itself and Quandt demanded to be heard. He was incensed by the board’s trickery and now strenuously objected to selling out to Daimler and pointed to the 700’s recent success as the road to recovery. Quandt’s arguments were compelling and his passion for BMW carried the day. Stuttgart’s bid was rejected and Quandt injected substantial amounts of his own capital (he soon owned 50% of BMW) to keep BMW independent and in business.
The year 1960 was make-or-break time for BMW, but Quandt’s gamble paid off. The 700 sold like hotcakes and pulled the company out of its V8-shaped hole. With last-minute help of engineers poached from Borgward, BMW entered the very heart of the European car market with a 1500cc car that had been in development for many years. The Neue Klasse, with its Corvair-inspired styling, brilliant engine and quality workmanship, came in 1962 to complete the work started by the 700, transforming BMW from a relatively obscure Bavarian firm to a globally-renowned automotive giant.
The firm did not abandon its long-suffering V8 range immediately, though. The Baroque Angels (now called either 2600L or 3200 Super) were kept in the range, now featuring the first disc brakes on a German-made saloon and slightly hotter engines. The final examples were made in 1963.
Presented alongside the Neue Klasse in late 1961, the Bertone-styled 3200CS was to be the last new model of the V8 line. If nothing else, it is remembered for being the first BMW to feature the famous “Hofmeister kink”, as well as the round taillights that would be used on the second generation Neue Klasse in 1966.
The 3200CS was a beautiful way to close the chapter on BMW’s disastrous decade. Like its predecessors, it sold in very small quantities and probably at a loss, but by this time, BMW could afford a halo car. For his good works, Herbert Quandt received a unique 3200CS convertible, specially-made by Bertone in 1962. Quandt was virtually blind, so he enjoyed the car from the passenger’s seat. Only 603 bodies were built by Bertone until the end of 1965, when the last BMW V8 left the Munich factory.
All told, BMW built 23,120 post-war luxury cars (6-cyl. and V8 saloons, 503, 507 and 3200CS) and chassis from 1951 to 1965, of which less than 7000 were V8-powered saloons. Over a slightly shorter time span, Mercedes-Benz sold about 11,400 units of their hand-built super-exclusive W186/W189 “Adenauer” limousines, which were much more expensive than the BMWs.
The BMW V8 range was almost a Deadly Sin in that it almost killed the company. The cars that used these engines were well-crafted and solidly built, but completely out of step with the market both at home and abroad, invisible within a sea of Mercedes-Benzes, Opels and prestigious foreign rivals. BMW made mistake after error throughout the ‘50s, only to pull out the only trump card left in its hand, the 700, at the last trick. This gave BMW’s white knight Herbert Quandt just enough leverage to save the firm. But others would not be so lucky…
Let’s have a look at one such unlucky company, Borgward, in tomorrow’s installment.
Related reading: CC 1962 BMW 1800 “Neue Klasse” – The Car That Saved and Made BMW PN