How the 700 saved BMW from a takeover
BMW’s history started with airplanes, not cars, a start depicted in its stylized badge that features a spinning propeller. It evolved from Munich-based airplane engine maker Rapp Motorenwerke, established in 1913 by ex-Daimler engineer Karl Rapp.
Rapp Motorenwerke became Bayrerische Motorenwerk (Bavarian Motor Works) in 1917, and in 1923 began manufacturing motorcycles. By the end of the decade, after an aborted attempt to develop its own car, BMW began building the tiny English Austin Seven, which they called the Dixie, in Eisenach, Germany.
BMW was soon producing cars of its own design, most notably its famous 328 model introduced in 1936. It established BMW as a serious automobile manufacturer.
The Second World War brought auto production to an end, and BMW engaged in war work, including building engines. Following the war, the Eisenach plant ended up in the Soviet zone, where it was nationalized and produced pre-war-designed BMWs until 1955.
The Munich motorcycle factory was in the American zone and managed to get back on its feet making pots, pans and other utensils. Eventually, it was able to start manufacturing motorcycles again.
BMW resumed manufacturing cars in 1952 in the Munich motorcycle plant, large six- and eightcylinder models, including the lovely new 507 and 508 sports cars.
Unfortunately, these were not profitable in a recovering economy, so financially precarious BMW resorted to building the Isetta “Bubble Car” during the mid-1950s. The two-passenger coupe with front opening door wasn’t glamorous, but it sold well enough to provide badly needed cash flow.
The little Isetta 300 was joined in 1957 by a stretched fourpassenger version, the Isetta 600, similar to the 300 but with a conventional rear track and busshaped sedan body. While not very popular, it provided valuable components for the model that would play a critical role in BMW’s continued existence.
That new BMW came at the initiative of Wolfgang Denzel, BMW’s Austrian distributor. No stranger to automobile competition and the industry, Denzel had raced successfully and produced his own sleek, VW-based Porschelike Denzel roadsters for several years.
Denzel convinced BMW management to let him develop a prototype of his idea for their new car, a project begun without a written contract and funded with his own money.
Denzel engaged Italian coachbulder Giovanni Michelotti to design and build his small prototype coupe, based on Isetta 600 running gear. It had unit construction, new to BMW.
The new car was shown to BMW management in July 1958. They liked the attractive little rear-engine coupe but requested more passenger space. With an agreement for the addition of a sedan, the board immediately authorized production of the 700.
BMW designer Wilhelm Hofmeister set about creating a two-door sedan version, while the engineering department enlarged the air-cooled horizontally opposed twin to 697 cc. They managed to get the 700 ready for introduction at the Frankfurt Auto Show in September 1959, where it was greeted by a very appreciative audience, backed by several thousand orders.
In the meantime, BMW continued losing money. It all came to head at the drama-filled December 1959 general meeting. In an attempt to orchestrate a Mercedes-Benz takeover of BMW, the banks and BMW’s senior management had “cooked the books” to make BMW’s financial position appear worse than it was. But a determined group of shareholders and dealers managed to thwart the attempt, and keep BMW independent. Major shareholder Harald Quantd played a significant role in this endeavour.
The takeover attempt was defeated mainly based on the substantial advance orders on hand for the new 700. BMW had been saved as a separate company by many small shareholders and the dealer body using the little 700 as their weapon.
The smart-looking production BMW 700 coupe and two-door sedan had the 600’s four-wheel independent coil-spring suspension with leading arms in front and trailing arms at the rear. The air-cooled, two-cylinder rear engine drove through a fourspeed, fully synchronized manual transmission.
Road & Track reported that the 696-cc, 35-horsepower engine pushed the 653-kilogram coupe to 100 km/h in 29.0 seconds, and a top speed of 121 km/h.
While not scalding performance, it was not far off the bestselling import Volkswagen’s 27.7 seconds to 100, and a little faster than VW’s 115 top speed.
The 700 was BMW’s saviour. In addition to coupe and sedan, there was a cabriolet version and a competition 700RS model that enjoyed racing success. When production ceased in November 1965, almost 190,000 700s had been produced.
The 700 not only saved BMW, it enabled the launch of conventional front-engine, rear-drive models including the 1962 1500, which led to the renowned 2002 and the firm’s subsequent (and ongoing) prosperity.