[John in VA]

Originally Posted by CalCarNut

If memory serves, Lambo was to design/build the M1 for BMW..but BMW changed their mind and pulled it back to inhouse...so you are correct sir!

As the project emerged, the E26 (en*gineering concept 26) would be designed by Giugiaro and his Ital Design staff around the proven CSL racing engine. Lamborghini would build 400 cars, making the design eligible for Group 4 racing. Once homologation was completed, a turbocharged version of the CSL six-cylinder would be fitted to the factory race car, and, went the plan, the winning would commence.

Lamborghini’s financial problems postponed the start of production beyond the original 1977 deadline, so BMW Motorsports hastily created the racing 320i for Group 5 competition. Although the M1 was formally announced soon after (January 1978), Lamborghini’s imminent bankruptcy finally forced BMW to cancel its contract on April 20, 1978. Under a new plan, Marchese would build the car's tube frame, TIR would mold the fiberglass, and then Ital Design would mate the two and install the interior. The cars would then be shipped from Italy to Stuttgart, where Baur, long a builder of BMW production prototypes, would install the BMW hardware. BMW Motorsports would do the final preparation in Munich—in fact, the car would carry a BMW Motorsports manufacturing plate.

http://www.caranddriver.com/features...the-m1-feature