In our recent article about the Packard One-Twenty, we talked about how not to build a brand. This week, we’ll look at the postwar rebirth of BMW and how the company built one of the world’s most successful automotive brands. We’ll also take a look at one of your author’s personal favorite cars: the 1965-1975 BMW E9 coupe, including the 2000CS, 2800CS, and the legendary BMW 3.0 CSL.
The company that is now Bayerische Motoren Werke AG was born in 1913 as Rapp Motoren Werke, headquartered in a suburb of Munich, the capital of the German state of Bavaria. Its initial business was not cars but airplane engines, most notably a license-built version of Austro-Daimler’s V-12 aero engine, used in a variety of combat aircraft during the First World War. In 1916, the company was reorganized as Bayerische Motorenwerke GmbH, which went public (becoming an Aktiengesellschaft, or AG) in 1918. By then, Rapp had departed and management of the company had passed to Austrian engineer Franz Josef Popp.
With aviation work in short supply after the 1918 Armistice, BMW branched out into motorcycles, launching its first bike in 1923. Automobiles followed in 1928, when the company purchased a failing business called Dixi, which manufactured a licensed version of the British Austin Seven. By 1933, BMW was producing cars of its own design. They were modestly sized and fairly expensive, but they had brisk performance and sleek, modern styling by Peter Schimanowski. The pinnacle of the line was the 328 roadster, which dominated European sports car competition until war intervened in 1939.
During World War II, BMW turned its efforts to military vehicles and aircraft engines, some allegedly built by slave labor. As a leading producer of war materiel, the company’s factories were seized by the Allies in 1945 and it was not until 1947 that BMW president Kurt Donath (who had succeeded Popp in 1942) obtained permission to return to motorcycle production. Automobile production did not resume until 1951.
The fifties were a difficult decade for BMW, with neither its cars nor its motorcycles selling in sustainable numbers. By the end of the decade, the firm was in serious danger of bankruptcy or of being absorbed by a larger company like perennial rival Daimler-Benz, a prospect that made BMW dealers and some stockholders very unhappy.
Since 1958, speculators (and half-brothers) Harald and Herbert Quandt had been buying up BMW stock, taking advantage of the new shares the company kept issuing in hopes of raising capital. Following a complex 1960 stock reorganization, the Quandts ended up with a 66% ownership stake in BMW. They quickly set to work replacing key management personnel with their own people or recruits and borrowed DM 50 million (about $12.5 million) from the government of Bavaria to help fund BMW’s new direction.
The result, launched in the fall of 1961, was the highly successful Neue Klasse (“New Class”) car line, which became the template for most future BMWs.
Let’s talk about what it takes to build (or rebuild) a successful brand.
Rule One: Don’t Set Your Sights Too High, Too Soon (But It Doesn’t Pay to Set Your Sights Too Low, Either)
BMW’s 1950s 500-series models (nicknamed Barockengel, “Baroque Angels”) were fine cars with attractive if faintly dated styling, admirable engineering, and a modern V8 engine — a rarity in European cars of the era. There was also a lovely sports car, the 507, styled by Albrecht von Goertz. Unfortunately, the Baroque Angels were far too expensive for their market even in America, where they cost almost twice as much as a contemporary Cadillac. Consequently, they sold in very small numbers and the company ended up losing money on each one.
In the mid-fifties, Kurt Donath had tried to shore up BMW’s volume with a license-built German version of the Iso Isetta, a curious-looking “bubblecar” powered by a one-cylinder motorcycle engine. Looking more like the escape pod from some science fiction spacecraft than a car, the Isetta had little relationship to other BMWs in either appearance or performance. It was followed in 1957 by the BMW-designed 600, again powered by an air-cooled motorcycle engine, and in 1959 by the more conventional-looking 700. The 600 and 700 sold fairly well, but not well enough to make up for the significant losses incurred by the pricier 500-series.
After the Quandt buyout, new sales boss Paul Hahnemann decided the Neue Klasse sedans should be positioned squarely in the middle-class market against other upscale European family cars. With a starting price of DM 9,485 DM (equivalent to around $2,400) in Germany, the initial BMW 1500 sedan cost about twice as much as a 700, but less than half as much as the Barockengel sedans, which would expire in 1963. The 700 survived through 1965, but after that, BMW decided to concentrate its limited production capacity on the more profitable Neue Klasse cars and, starting in 1966, their smaller 1600-2 (1602) and 2002 counterparts. It would turn out to be a sensible business decision.
Rule Two: You’ve Gotta Have a Gimmick
Although the Neue Klasse was more attractively priced than the Barockengels, it faced an uphill battle against its established mass-market rivals. A firm of BMW’s size could hardly hope to go head to head with Ford, Opel, and Volkswagen on volume or price; even with the Quandt family’s backing, the Bavarian firm had nowhere near that level of capital and had a much smaller distribution network. To survive, BMW needed to offer some unique, defining virtue or virtues its competitors did not.
It was certainly not going to be style. The Neue Klasse sedans were tall and boxy, which was certainly practical, but hardly fit mid-sixties notions of automotive sex appeal. Nor was it going to be exotic specifications, although BMW’s engineering was thoroughly up to date, featuring unitized construction, overhead-cam engines, front disc brakes, and fully independent suspension. Instead, BMW’s managers decided that their calling card should be vigorous performance.
Performance, in this case, demands some qualification. By American standards, no sixties BMW was particularly fast. An early 1500 sedan took 14 seconds to reach 60 mph (97 km/h) and had a top speed of perhaps 95 mph (153 km/h), in the same realm as U.S. compacts like the Plymouth Valiant; the 1600 and 1800, added in 1964, were a bit quicker. In 1964, there was the BMW 1800-TI (or 1800ti), with a more powerful dual-carburetor engine that trimmed 0-60 mph (0-97 km/h) times to 12 seconds or less and allowed a top speed of up to 109 mph (175 km/h), but even that was no great shakes by contemporary Supercar standards.
What the Neue Klasse and its successors lacked in outright performance, however, they made up in well-sorted road manners and accurate, balanced controls. They had limitations, of course, like a tendency to slide the tail if you lifted off the throttle too abruptly in a fast turn (a characteristic of the semi-trailing arm suspensions that BMW used until the nineties), but these innocuous-looking Bavarian sedans handled as well as many contemporary sports cars. Unlike many sports cars, they also retained their composure over rough roads, thanks to ample wheel travel, low unsprung weight, and firm damping.
It was well that BMW was not looking for mass-market appeal, because the Neue Klasse‘s virtues were not immediately obvious to less-enthusiastic drivers. True, an 1800ti performed as well as some workaday American V8 sedans, but $3,500-odd (U.S. POE) was still a lot of money for a stubby-looking compact car with an austere interior, a rather stiff ride, and little of what most non-German buyers would consider luxury. However, if you wanted a relatively practical sedan that could still be driven con brio, your principal alternatives were the Alfa Romeo Giulia TI and the Jaguar S-Type, which often suffered haphazard build quality, aggravating electrical gremlins, and demanding maintenance schedules. The BMW wasn’t as pretty to look at as were its British or Italian opposite numbers, but its engineering and assembly quality were top-drawer and it was far less fussy to own.
In short, BMW found a niche in which it had little serious competition, if less through its own achievements than through the various lapses of its few direct rivals.
Rule Three: Make Your New Products Logical Extensions of Your Existing Ones
Not long after the Neue Klasse sedans went on sale, Hahnemann and marketing director Helmut Bônsch began lobbying for the creation of a bigger sedan in the same mold, powered by a new six-cylinder engine. It was intended as a more profitable successor to the old 2600 and 3200 sedans and a rival for midsize Mercedes-Benz models.
The new engine, developed by new technical director Bernhard Osswald (previously of Ford-Werke), debuted in 1968 in 2,494 cc (152 cu. in.) and 2,788 cc (170 cu. in.) versions. The six powered new 2500 and 2800 sedans (known internally as E3), which were essentially scaled-up versions of the Neue Klasse, albeit with various mechanical refinements and detail changes. Predictably, the E3 sedans shared their predecessors’ road manners and enthusiasm for aggressive driving, albeit with more power and a higher level of refinement.
The New Six sedans proved to be almost as popular as the Neue Klasse. Their road manners made them popular with automotive critics and buyers responded warmly. The E3 sedans would sell more than 220,000 units between 1968 and 1977 and eventually spawned BMW’s highly successful 5-Series and 7-Series sedans.
In between the Neue Klasse and the New Six were the coupes, known to BMW as Model 120. First introduced for the 1965 model year, they were essentially sportier, two-door versions of the Neue Klasse sedan, sharing most of its mechanical components.
The Model 120’s styling had a convoluted history. Back in September 1961, BMW had launched the pricey 3200CS, a hardtop coupe riding the old Barockengel chassis and powered by the last of BMW’s fifties V8 engines. The 3200CS was not styled by BMW, but rather by Giorgetto Giugiaro of Bertone, which also built the bodies. Although quite attractive, the coupe was very expensive and only 603 were built between 1961 and 1965.
The 3200CS was replaced in 1965 by a new coupe based on the Neue Klasse and sharing the sedan’s floorpan and some of its inner stampings. The coupe was built by Karmann, but styled by BMW’s in-house design chief Wilhelm Hofmeister, who gave the Model 120 a shortened variation of the 3200CS greenhouse. The results were decidedly odd, with an attractive roofline, peculiar proportions (largely dictated by those of the sedan), and some very eccentric detailing — particularly the grille and headlight treatment. Overall, the coupe was interesting but somewhat gawky-looking, far less graceful than its Italian-styled forebear.
Unlike the V8-powered 3200CS, the new coupe had a four-cylinder engine: a bored-out 1,990 cc (121 cu. in.) version of the engine in the 1800 sedan. The bigger engine was offered in single-carburetor form for the 2000C and 2000CA coupes (the latter having a three-speed ZF 3HP22 automatic transmission) while the 2000CS had a more powerful twin-carburetor edition, also used (from January 1966) in the new 2000ti sedan. Otherwise, the coupe was mechanically similar to the sedans, sharing the same suspension, brakes, and transmissions.
Rule Four: Be Careful Not to Lose the Plot
In its original four-cylinder form, the Model 120 coupe did not make a strong case for itself. It was a kind of Bavarian Ford Thunderbird: a personal luxury coupe that sacrificed a good deal of the Neue Klasse‘s no-nonsense practicality for (somewhat dubious) styling flair. Admittedly, the Model 120 shared many of the virtues of its sedan brethren, including fine road manners, decent fuel economy, and generally excellent build quality (if not quite to the standard of cars built at BMW’s own Dingolfing plant and suffering an alarming lack of rust-prevention measures). It was also surprisingly roomy for a coupe.
However, the coupe wasn’t any faster than a comparably equipped BMW sedan and cost substantially more: DM 16,905 to 17,500 in Germany, $4,985 POE in the U.S. At that price, it became harder to ignore the fact that the Alfa Romeo Giulia Sprint was around $800 cheaper, arguably better-looking, and had features the BMW lacked (including a five-speed gearbox and four-wheel disc brakes). An extra $500, meanwhile, would buy you an E-type Jaguar, which was prettier and far faster, if more likely to be troublesome.
The simple answer to these shortcomings was to add the E3’s six-cylinder engine to the coupe, which BMW did in 1968, earning the coupe a new type number: BMW E9. In the process, the coupe’s front end and wheelbase were both stretched, vastly improving its proportions in the process, while a minor facelift added a more aggressive, shark-like nose.
Although the new 2800CS was around 300 pounds (136 kg) heavier than the four-cylinder 2000CS, the E9 was considerably better-looking (your author considers the six-cylinder E9 among the best-looking cars of its era) and had nearly 60 additional horsepower (40 kW). The 0-60 mph (0-97 km/h) sprint could now be accomplished in around 9 seconds and top speed approached 130 mph (205 km/h). Despite the additional muscle, the 2800CS could still return close to 20 miles to the gallon (12 L/100 km) in more cautious driving.
Unfortunately, the E9 suffered the same problem as its four-cylinder predecessor and the old Baroque Angels: While it was very desirable in many respects, its price exceeded its tangible virtues by at least 30%. A 2800CS started at DM 22,980 in Germany and around $8,800 in the U.S., which made the BMW coupe significantly more expensive than an E-type and a bit more expensive than a Porsche 911. Even critics who were smitten with the 2800CS found the price tag hard to justify, particularly when the 2800 sedan offered the same mechanical package and greater practicality for about 25% less money. Consequently, only about 3,500 six-cylinder coupes were built in 1969, followed by 5,242 in 1970 and a few more in 1971 before the 2800CS was replaced by the similar 3.0 CS.
Rule Five: Be Prepared to Put Your Money Where Your Mouth Is
Nothing props up the perceived value of a sporty car like an authentic competition pedigree, so BMW decided to take the E9 coupe racing. The early efforts, run mainly by independent tuner Alpina, were none too successful, but they got a shot in the arm in May 1972 with the advent of the lightweight 3.0 CSL, which used thinner-gauge steel, plastic windows, and many aluminum parts to trim more than 300 pounds (140 kg) from the E9’s curb weight. Once down to fighting weight, the coupe became far more competitive, though still not a world-beater.
That changed in 1973, when BMW and Alpina developed a wild-looking array of wings and spoilers for the CSL, aimed at reducing drag and eliminating the aerodynamic lift that had previously compromised the E9’s handling at racing speeds. The aero kit, which soon earned the CSL the nickname “Batmobile,” looked outré, but it worked, vastly improving the coupe’s high-speed handling.
With its Batmobile wings and a new 3,453 cc (211 cu. in.) version of the big six, the CSL suddenly became a fearsome contender. It won its class at the 24 Hours of Le Mans in 1973 and went on to dominate European racing until 1979, four years after it went out of production. It won a total of five European Touring Car championships and was highly successful in various U.S. events as well, seriously challenging Porsche’s previously unassailable IMSA domination.
All this sturm und drang did not make the production BMW E9 a hot seller. Like the contemporary Citroën SM, its sales were hit hard by the OPEC oil embargo of 1973-74. By the time production ended in December 1975, BMW had built a grand total of 30,546 six-cylinder E9s and 13,696 four-cylinder coupes (which had ended production in early 1970). Only 1,096 of those were CSLs, which were offered to the public only to homologate them for racing. If the coupes had been the company’s sole product, BMW probably would have ended up in receivership, especially if the expense of the factory’s racing efforts were added to the tab.
Fortunately, the E9 coupes eventually justified themselves with their spectacular racing success, which had a highly salutary effect on the company’s sporting image. Admittedly, the relationship between race cars and production models is usually rather remote, but the same connoisseurs who appreciate BMW-type virtues tend to be enamored of the fantasy that with only a few simple modifications, their car could lap the Nürburgring with the best of them. The CSL’s racing exploits certainly added luster to the E9’s successor, the E24 6-Series, as well as the later E30 M3 and M5 sedans.
Rule Six: Keep Telling the Same Story
BMW underwent a series of management shifts at the end of the 1960s. Harald Quandt died in a plane crash in 1967, leading to renewed fears that BMW would end up in the hands of Daimler-Benz. (It didn’t happen and the Quandt family still retains a controlling interest in BMW.) Powerful sales chief Paul Hahnemann, who had looked like a strong candidate for the new company chairman, was passed over in favor of Quandt Gruppe executive Eberhard von Kuenheim in January 1970, who then forced Hahnemann out.
Hahnemann’s successor was an American named Bob Lutz, previously of Opel (and later GM’s product czar), who was the instigator of many of the factory racing efforts as well as the originator of BMW’s Motorsport subsidiary. Lutz didn’t stick around for long, but von Kuenheim remained head of the company until 1993, during which time BMW’s worldwide volume quadrupled.
In 1974, BMW’s U.S. ad agency coined the now-familiar “Ultimate Driving Machine” slogan, which the company has used ever since. Even as its cars grew bigger and generally more mainstream, BMW repeated that message relentlessly, to the point where it could be recited (however derisively) even by people who knew nothing about cars. Whether you believed it or not, there was little doubt about what a BMW was supposed to be.
Since the mid-seventies, many automakers, ranging from Pontiac to Mercedes-Benz, have made BMW’s cars the design bogeys for their new product development. What those rivals have really been after is not so much BMW’s performance, but the coherency of its brand image; most any marketing executive in the world would sell her own grandmother for the kind of branding BMW has achieved in the past 30 years.
There’s no particular magic to BMW’s success and if we were so inclined, we could be quite cynical about it. Ordinary sedans handle far better today than they did 40 years ago, and if BMWs have an edge, it is far narrower than it was in 1970. Even if you like BMWs (and here your author must confess a fondness), it’s difficult to justify their inflated prices unless you put a considerable premium on having a little blue-and-white emblem on your hood.
What we must respect about BMW as a company is not its performance, its styling, or its financial success, but its impressive sense of focus. That’s not to say it hasn’t periodically lost its way or that all its decisions have been good ones, but the company has stuck to its guns for more than four decades. In a business that tends to water down every good idea and that seems always to chase the lowest common denominator, that’s an admirable achievement, even if the results aren’t always to taste.
Our sources included Mike Covello, Standard Catalog of Imported Cars 1946-2002, 2nd ed. (Iola, WI: Krause Publications, 2001); Jan P. Norbye and the Auto Editors of Consumer Guide, BMW: Bavaria’s Driving Machines (New York: Beekman House/Publications International, 1984); Bob Lutz, Guts: 8 Laws of Business from One of the Most Innovative Business Leaders of Our Time, Second ed. (Hoboken, NJ: Wiley, 2003); “Car and Driver Road Research Report: BMW 1500,” Car and Driver August 1963; “Road Research Report: BMW 2000 CS,” Car and Driver April 1966; Patrick Bedard, “Viewpoint: Patrick Bedard: BMW 2500,” Car and Driver June 1969; and “Car and Driver Road Test: BMW 2800 CS,” Car and Driver December 1969, all of which are reprinted in Car and Driver on BMW Cars 1957-1977, ed. R.M. Clarke (Cobham, England: Brooklands Books Ltd., ca. 1986); “BMW 2800 CS,” Road & Track Vol. 21, No. 6 (February 1970), pp. 100-107; “BMW 3.0CS: A glorious blend of Grand Touring qualities,” Road & Track Vol. 24, No. 11 (July 1973), pp. 88-91; and “Road & Track Owner Survey: BMW 2800, Bavaria & CS,” ibid, pp. 93-95; and “Giant Test: Five grand plus: Citroen SM v. BMW 3.0 CS, CAR December 1971, reprinted in Citroen SM 1970-1975 Limited Edition Extra, ed. R.M. Clarke (Cobham, England: Brooklands Books, Ltd., 2001), pp. 62-72. Some useful information on the racing coupes came from Jonathan Thompson, “BMW vs Ford,” Road & Track Vol. 24, No. 11 (July 1973).
Production numbers and some technical details came from the BMW 3.0cs, 3.0csi, 2800cs, and BMW SL e9 models coupe site, www.e9coupe. com, accessed 17 November 2008; the BMW Coupé-Club e.v. site, www.bmw-coupeclub. de, last accessed 11 September 2015; and Luca Ciferri, “Volume leader in automobile design,” European Automotive Hall of Fame, 2006, www.autonews. com, accessed 17 November 2008.
Historical exchange rates for the DM to the dollar came from Harold Marcuse, “Historical Dollar-to-Marks Currency Conversion Page,” UC Santa Barbara, 19 August 2005, www.history.ucsb. edu/faculty/ marcuse/projects/currency.htm. Our estimates of the present equivalency of historical amounts are based on the United States Bureau of Labor Statistics Inflation Calculator, data.bls.gov/cgi-bin/cpicalc.pl. All equivalencies cited in the text are approximate and are provided for illustration and informational purposes only — this is an automotive history, not a treatise on currency trading or the value of money, and nothing in this article should be taken as financial advice of any kind!