Prior to founding his company, Lamborghini had commissioned the engineering firm Società Autostar to design a V12 engine for use in his new cars. Lamborghini wanted the engine to have a similar displacement to Ferrari's 3-litre V12; however, he wanted the engine to be designed purely for road use, in contrast to the modified racing engines used by Ferrari in its road cars. Autostar was led by Giotto Bizzarrini, a member of the "Gang of Five" of Ferrari engineers, who had been responsible for creating the famous Ferrari 250 GTO, but left the company in 1961 after founder Enzo Ferrari announced his intention to reorganize the engineering staff. The engine Bizzarrini designed for Lamborghini had a displacement of 3.5 litres, a 9.5:1 compression ratio, and a maximum output of 360 bhp at 9800 rpm.
Lamborghini was displeased with the engine's high revolutions and dry-sump lubrication system, both characteristic of the racing engines he specifically did not wish to use; when Bizzarrini refused to change the engine's design to make it more "well mannered", Lamborghini refused to pay the agreed-upon fee of 4.5 million Italian lire (plus a bonus for every unit of brake horsepower the engine could produce over the equivalent Ferrari engine). Lamborghini did not fully compensate the designer until ordered to do so by the courts.
The chassis design for the first Lamborghini car was created by famed Italian chassis engineer Gian Paolo Dallara. Drawing on his experience working for Ferrari and Maserati, he assembled a team that included recent college graduate Paolo Stanzani and New Zealander Bob Wallace, who had previously been employed at Maserati, and was known for his keen sense of chassis handling and excellent feedback and developmental skills. Lamborghini hired then-relatively unknown designer Franco Scaglione to style the car's body, after turning down highly regarded names like Vignale, Ghia, Bertone, and Pininfarina.
The Lamborghini 350GTV was designed and built in only four months, in time for an October unveiling at the 1963 Turin Motor Show. Due to the ongoing disagreement with engine designer Giotto Bizzarrini, a working powerplant was not available for the prototype car in time for the show. The car went on display in Turin without an engine under its hood; according to lore, Ferruccio Lamborghini had the engine bay filled with bricks so that the car would sit at an appropriate height above the ground, and made sure that the bonnet stayed closed to hide the missing engine. The motoring press gave the 350GTV a warm response.
The Automobili Lamborghini Società per Azioni was officially incorporated on October 30, 1963. Ferruccio Lamborghini purchased a property at Via Modena, 12, in the township of Sant'Agata Bolognese, less than 30 kilometres (19 mi) from Cento. A sign at the entranced declared "Qui Stabilimento Lamborghini Automobile" (English: Lamborghini car factory here), boasting 46,000 square metres (500,000 sq ft) of space. Sant'Agata was chosen as the location for the factory due to a favorable financial agreement with the city's communist leadership, which would not tax the plant's profits for its first ten years of trading, along with receiving an interest rate of 19% on those profits when they were deposited in the bank. As part of the agreement, the workers would have to be unionized. Sant'Agata was deep in the cradle of Italy's automobile industry, meaning that Lamborghini's operation would have easy access to machine shops, coachbuilders, and workers with experience in the automotive industry.
Despite the favorable press reviews of the 350GTV, Ferruccio Lamborghini decided to rework the car for production. The production model, which would be called the 350GT, was restyled by Carrozzeria Touring of Milan, and a new chassis was constructed in-house. Bizzarrini's V12 engine would be detuned for mass production, developing only 280 hp rather than the designer's intended 360 bhp. The completed design debuted at the 1964 Geneva Motor Show, once again garnering positive reviews from the press. Production began shortly afterwards, and by the end of the year, cars had been built for 13 customers; Lamborghini sold each car at a loss in order to keep prices competitive with Ferrari's. The 350GT remained in production for a further two years, with a total of 120 cars sold.
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