At the beginning of 1975 a program began to take shape in which Giugiaro’s company would join Lamborghini and BMW in developing a two-seat sports coupe with very high performance. The design came from Giugiaro, the chassis and engineering from Lamborghini, and the driveline from BMW. The aim was to boost the Bavarian company's sporting image. The BMW M1 was therefore entered in Groups 4 and 5 of the Pro Car European championship, with the races held during each Formula 1 meeting.

The design of the M1 took its cue from one of the most famous concept cars in BMW's history, the Turbo, built for the 1972 Olympics and featuring a rear-engine architecture. Giugiaro defined lines that were lighter and less imaginative than those of the Turbo concept, but had great appeal, with pop-up front headlights and a sturdy one-piece rear hood that covered both the engine and the small luggage compartment immediately behind it. The conspicuous C-pillars acted as fins linking the upper body to the truncated tail of the car.

The new mid-engined coupé - baptized as the M1 - was designed at Lamborghini (3453 cc, six-cylinder engine, 277 bhp at 6500 rpm), which was due to produce the 450 examples required for homologation. The financial crisis that struck the Sant'Agata Bolognese factory induced Giugiaro to produce the cars in his own factory at Moncalieri, for the first and only time in its history.

This design reached considerable heights shape-wise, despite its having introduced no innovative features. Reference is made to the Volkswagen Passat (1973), but the third back window, now sporting a base that follows the belt-line, is much more attractive and characterizes the side for its overall elegance. Volumes were carefully proportioned and various graphical touches show the close attention paid to detail. Both the front and back are characterized by horizontally wrapping, rectangular lights.

After the Asso di Quadri experience, Giugiaro continued his research on shape in the direction of the utmost exterior cleanness, to make the model look lighter but especially for reasons of aerodynamic drag. The plan view highlights the wrapping movement of the sides, while the cut-off tail interrupts the rounded shape of the whole. The C-pillars, long and thin (like on the Maserati Merak, 1972), enable the application of an elliptical-dome roof and provide the support for a large spoiler. Contrasting the clean and unadorned front is a rear end overloaded with graphic motifs.

Megagamma was Giugiaro's answer, realistic and technically feasible like all his prototypes. Giugiaro was faced with the discomfort of many production cars, perhaps costly and pretentious but that in order to offer a low and streamlined sporty look, sacrificed comfort and roominess. So he opted for a radical project that would see the car as a "moving passenger compartment". From the standpoint of form alone, styling took a back seat to the overall design of the vehicle. Giugiaro concentrated on dimensions and ergonomics, letting the shape encompass themes of which he is fond. What resulted aesthetically was, thus, new, surprising and perhaps even a bit disconcerting, but recalled the shapes of the car's pioneer days when, as Giugiaro loves to point out, “you climbed up into the car”.