BMW management never saw the Isetta or 600 as “cars.” They were stop-gap efforts that might help the company get to the real goal, a mid-sized, conventional car. This was the goal throughout the 1950s, but the company was undercapitalized after the war and continued losses made the financial situation ever worse. It didn’t help that management was at times timid, inept and arrogant. Quite a combination.
The internal development department tried to stretch the chassis of the 600 further in order to accommodate a more conventional-looking car. This proved impossible, but the engineers—and the accountants for that matter—wanted to use the suspension and drivetrain that had been developed for the 600. Fritz Fiedler, the legendary engineer from the 1930s, clung to the “rightness” of the 600, despite the market not accepting the car.
Enter Wolfgang Denzel, the Austrian importer for BMW and an engineer himself. Denzel was commissioned by the BMW CEO to develop a car outside the normal BMW process. Denzel, in turn, asked Albrecht Goertz, to do a modern small-car design. Goertz had done the beautiful 503 and 507 for BMW. Goertz’s fee was too high for the struggling company, so he recommended his friend, Giovanni Michelotti, who got the job.
Michelotti’s prototype used the mechanicals from the 600, with the engine enlarged but still in the rear, and wrapped them in a unibody design that sidestepped the problem of further stretching the 600’s chassis. It became BMW’s first unibody car.
While Michelotti’s coupe prototype went into production in virtually unchanged form, BMW internally developed a two-door sedan version and then followed with the 700 LS (Luxus), 700 Sport/CS and finally, the lovely 700 Sport Cabriolet. The 700 was the first BMW to feature the Hofmeister kink, the rear window line that has been the hallmark of all BMWs since then. Hofmeister was the head of BMW Design at the time.
The opposed two-cylinder engine started at 30 horsepower, was uprated to 40 hp in the sport version and eventually reached 70 hp in racing versions, known as the 700RS.