Fritz Fiedler and chief designer Alfred Böning started work on the 326 in late 1934, designing for it a rigid platform-type chassis with box-section elements.

The existing BMW front suspension was redesigned. Its transverse leaf spring was mounted above instead of below the frame, and torsion-bar springs were added for the rear axle. For the first time on a BMW four-wheel hydraulic brakes became standard. The 326 had a hydraulic braking system and rack and pinion steering, advanced features for the time.

The 326 was BMW's first four-door saloon and Peter Schimanowski's styling gave it a remarkably modern appearance. Its most striking feature was the front end, with enveloping wings and a grille which blended smoothly into the front panel. This grille, derived from earlier BMW designs, is the true ancestor of today's famous twin-kidney grille.

Available as a saloon, a two-door or four-door convertible, the BMW 326 had a 50bhp 2.0-litre straight-six engine with twin carburetors, four-speed part-synchronized transmission with a freewheel and a top speed of 71mph.

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