The German middle class was ready for the BMW 1500 when it debuted at the Frankfurt Motor Show in 1961. Orders poured in by the thousands, and BMW soon realized they had a tiger by the tail. BMW wasn’t ready for the 1500.
As a member of the Verband der Automobilindustrie (VDA), BMW was to have had the 1500 in production not long after its public showing. In 1962, well after the deadline for start of production had passed, the VDA came to inspect BMW. A ‘Potemkin Village’ was set up at Milbertshofen to show production of 1500s with approximately twenty cars on the line. The VDA was not amused but went along with the ruse. BMW had a long way to go before cars were to be seen rolling off the assembly line.
The BMW 1500 Was Different
The German middle class was attracted to the 1500 because of its restrained styling – in sympathy with the times and German values; not to mention its road holding and, for the times, energetic performance. While the mid range offerings of Ford and Opel echoed American styling cues, with fins and wide swaths of chrome, the BMW appeared authentic; and, the Hofmeister kink and kidney grilles told all, at a glance, that this was a BMW.
The 3200 CS
The other important car BMW had shown at the 1961 Frankfurt Motor Show was the 3200 CS. While the 1500 was a ‘clean sheet of paper design’, the 3200 CS reused 502 bits clothed in a Bertone designed body. Bertone had entrusted one of their young designers, Giorgetto Giugiaro, to pen the 3200 CS, the last of the 500 series cars. It never sold in large numbers but was the inspiration for the 3.0 CS, the E9 coupe – and which would become the ‘ne plus ultra’ of BMW Grand Touring cars.
The big cars, the 501 and the 502, had not strained the facilities at Milbertshofen, nor had the ‘bubble cars’. But the 700 sold in large numbers and BMW was building around 150 700s a day in 1961 and 1962. Additional space for production could be found by reusing the motorcycle test track and infield for another assembly hall. BMW’s problem, however, was as much an issue of tooling and skilled workers as anything else; but BMW knew that building the 1500 was the key to its future.
Meanwhile, in Bremen, Germany, Carl Borgward’s industrial empire had folded in 1961. The Goliath, Lloyd, Hansa, and Borgward marques ceased to exist. And a close competitor to the BMW 1500, the Borgward Isabella, died as well, increasing the sales potential of the 1500. In the end Borgward’s loss was BMW’s gain as highly qualified engineers and production tooling became available and were snapped up by BMW.
Adverted Crisis
There was yet another problem that had cropped up. Orders for the 700 were drying up after the 1500 was announced. BMW, strapped for positive cash flow to keep the lights on (and workers paid), needed sales expertise to deal with this crisis.
Paul Hahnemann was BMW’s new sales director. He had left Auto Union after it had been absorbed by Daimler Benz and then joined BMW at Herbert Quandt’s request. Reviewing the situation, he made quick work of it by identifying the weakest national importer (wholesaler) and making them an offer they couldn’t refuse. Other country’s importers understood the message and decided to accept 700s, arranging with dealers to move them. Before long the surplus of 700s were being shipped and cash flow kept the firm buoyant.
A New Generation of BMW Cars
Once production of the 1500 began in earnest, BMW could look towards expanding the range of vehicles. New models could be built given the flexibility of the M115 engine, the 1600, 1800, and 2000 would follow the 1500 and offer additional performance options for the middle class buyer. Of note was the 1800 Ti/SA of which only 200 units were built and sold only to driver’s with a valid competition license.
The 2.0 liter version of the M10 received an upgraded crankshaft with two counterweights for each rod journal and was internally known as the M05. This resulted in increased refinement at higher RPM and would be well received in the BMW 2002. Significantly, the M05 gave rise to the M06, a six cylinder version of the M05 with seven main bearings, double counterweights on the rod journals and, “Drei-Kugel-Wirbelwannen”, or triple, hemi, swirl combustion chamber. The M06 has often been described as turbine like in its acceleration thanks to its refinement. These engines would provide the foundation for BMW’s premium performance products in the years to come.
With its financial future assured, BMW could think about future models. And Paul Hahnemann exploited additional product niches, including the introduction of the two door 1600-2 and eventually the 2002, who shared styling cues with the sedans but were separate designs.
Buying Glas
In addition, new large cars, utilizing the excellent six cylinder engine, could be brought to life. This would require expansion – particularly skilled labor. Fortuitously, for BMW, Hans Glas GmbH had fallen on hard times. Glas was located in nearby Dingolfing and had a series of factory buildings and a skilled workforce. The buildings themselves were impractical for modern auto manufacturing, being wooden structures, but BMW needed the skilled labor. Glas was purchased in the mid 1960s and work began on building a new facility to manufacturer BMW’s proposed big cars.
Under Hahnemann’s guidance the dealers and importers made significant returns on their franchises. However, BMW was leaving money on the table – allowing the international distributors to reap a lion’s share of the profit. In 1969, with the current board chairman nearing retirement, Hahnemann thought he was a lock for the chairman’s role. Herbert Quandt, however, had another candidate for the board chair in mind.
von Kuhnheim Golden Era
On January 1, 1970 Eberhard von Kuhnheim was brought in to be the chairman of BMW. He had experience leading manufacturing companies within Quandt’s holdings, but no automotive experience. Hahnemann was said to have called the hiring of von Kuhnheim the, “[T]he most expensive apprenticeship program in the car industry.” It goes without saying that von Kuhnheim and Hahnemann clashed.
Within two years of von Kuhnheim taking charge, Hahnemann was gone. Under von Kuhnheim’s leadership BMW would embark on a fifty year golden era. In 1972, when Bob Lutz came on board as sales director, the modernization and rationalization of BMW sales began. BMW now took on the role of importer in as many countries as possible in order to protect their earnings. Lutz’s impact on the company in his short stint at BMW was huge, more for his ability to clean up sales and marketing than his well known decision to found BMW Motorsports, M. Under von Kuhnheim’s direction the tiger had been tamed and was about to be unleashed.
There is one last thing that should be mentioned, in 1972 Munich hosted the summer Olympic games. The entire city, and the Bavarian state were mobilized in support. BMW provided a pair of modified 1602s for transporting dignitaries and pacing some of the races. They were prototypes known as BMW 1602 Elektro-Antrieb, or 1602e – electric cars. The future was beckoning.
