By the late 1960s, the Karmann Ghia was over 10 years old. Despite still being extremely beautiful and still selling well, Volkswagen was aware that they would have to try and replace the car sooner rather than later. However, around this time, Volkswagen was also working on several other projects, such as the Golf and the Passat. As such, focus on replacing the Karmann Ghia was low.
Coincidentally, Porsche was also looking to replace a car in their line-up. The Porsche 912 was not selling too well, so Porsche was trying to come up with a sports car to replace it, but money was too tight. As such, Porsche and Volkswagen decided to pool resources and build a sports car together.
As part of a pre-existing agreement between Volkswagen and Ferdinand Piëch, Porsche would handle the full development of the project. The 914 was the last time Porsche and Volkswagen would collaborate on a project until the 21st century. Piëch and his team wanted one thing, and Volkswagen wanted something else, so the final design would end up being somewhat of a compromise.
The same would be true for the powertrain. The car had to be specially adapted to fit both the VW Boxer engine and the Porsche flat-six engine. This would end up affecting the balance of the car. However, despite these issues, tests indicated that the 914 handled better than the Karmann Ghia, and the 912. As such, Porsche gave it the seal of approval and began preparations to release it to the public.
However, when the time to release the car came, Volkswagen and Porsche became embroiled in a battle over several aspects of the 914 project. Volkswagen claimed that Porsche had violated a part of their agreement, and as such could not release the 914 under the Porsche name. Porsche wanted to market both the boxer and the flat-six versions as Porsche models in the US. In the end, both companies reached an agreement and compromised to get to middle ground.
The 914 was launched in 1969, and the VW-Porsche model enjoyed moderate success, but was not as successful as the Karmann Ghia. Porsche’s personal model, however, tanked and sold only around 3000 cars over seven years. Porsche eventually cut their losses and ended production in 1976, meaning that Volkswagen also stopped selling the 914 in 1976.
The 914 is a story of compromise. The two companies involved in the design and manufacture of the car wanted completely different things, and so had to compromise massively. In the end neither company really got what they wanted and neither did the public, who had been anticipating the launch of the 914 for a few years prior. In the end, the 914 left a bad mark on the Volkswagen-Porsche relationship, and it would be many years before this relationship would be mended.
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