The tooling was the issue, have a e12/28 535iM myself, and the degree of e28 in a e12/28 depends on the parts available.
On my car I have factory fitted e28 indicators on the side, assume that they did not have e12 when my car was built in March 1983.
Here soem more detail as it was published in the BMW magazine:
BMW, the E12 and the South African E12/8 535iM, if anybody is interested, have brochure and material available, could maybe put online here.
by Adi Stephan
Inspired by the Bertone Design Centre, Marcello Gandini created the groundbreaking style for the BMW E12 series at the beginning of the 1970’s. The process of designing a new four-door model range was started in 1968, and internally the project was code named “E12â€, “E†designating development (Entwickelung) and 12, representing the number of the project. The cars were styled by French stylist Paul Bracq, and the very first E12 was launched on the 13th September 1973, and was called the BMW 520.
The intention was to have this model range as the centre of the BMW product range. It was therefore selected it to be named 5 series, with the 20 designating engine capacity, in this case a 2 litre fuel carburettor engine, additional models like the 3 litre and 3.5 litre were added at a later stage. No diesel engine E12 was produced as BMW did not deem diesel engines suitable for high performance cars in those days. In addition to the 5 series, BMW had the smaller 3 series (E21) and larger 7 series (E23) as part of the product range.
In order to save on high import duties, BMW developed the concept of complete knock down (CKD) kits that were assembled at Rosslyn near Pretoria. Cars that were not locally produced to a large scale attracted a high import tax. From 1974 onwards more then 53000 CKD units were completed. The suspension, transmission and the engine were completely built in Germany. To produce them in South African in such a small production line would have raised the costs significantly.
Several components were sourced locally by BMW:
 Car ceiling
 Door panels (SA models, compressed wood instead of board)
 Armrests
 Different carpets / interior
The following cars were produced as part of this series, some very unique as CKD’s for the South African market:
 518
 518i E12/8 (CKD)
 520
 520i E12/8 (CKD)
 520/6
 523
 523i
 525
 528
 528i E12/8 (CKD)
 530 (South Africa only)
 530i
 530 MLE (South Africa only)
 533i
 535i E12/8 (CKD)
 M535i E12/8 (CKD)
The E12/8 was built and released in South Africa as the E12 was replaced by the E28 globally. The E12/8 was essentially an E12 body fitted with the E28 suspension, electronics and interior.
BMW continued the production of the successful E12, holding off on the launch of the E28, as new press tools would have cost too much for such small production. The price of a 520 BMW would have increased by R700, from the current price of R13590,-
In South Africa, the very last E12 was built in Rosslyn on the 5th of September 1985, bringing the total number of E12 BMW’s built globally to 722,435 cars.
In 1981 BMW launched the E12/8 535iM as part of the revised range. Known as model 4709 this car retained the E12 bodywork and mechanics, but had the updated interior. The 3453cc M30 inline-six engine was used to provide power. The car had either an overdrive or close ratio five speed manual gearbox, with a 3.07:1 final drive and limited slip differential. BMW once again opted, not to equip this car with any special M-designed spoilers or trim. Large front fog lights were fitted, and the grille and boot lid received the “M†badges.
The E12/8 535iM featured the new E28 style dashboard and instrument cluster. BMW also fitted the new check control panel above the rear view mirror. Interestingly the door panels and door release handles initially were those of the E12 (pull up door release handle), and only later models were fitted with the correct E28 door release handles. As standard the car was fitted with air conditioning, power windows (front and rear), power mirrors, central locking, rear headrests, check control, and a radio/cassette audio system with four speakers. A power steel sunroof was optional. Recaro front seats were fitted, which were covered in cloth with leatherette as side trim. The Model 4709 E12/8 535iM was available until December 1984 after which it was replaced by a true E28 based successor in January 1985.
Buying an E12/8 535iM in 1983 would have cost R30400, and BMW only produced 1416 units of the E12/8 535iM. Not many of the original cars have survived, and the for the next edition, we plan to have a feature on an E12/8 535iM that was produced on the 10th of March 1983 as a CKD in Rosslyn, sold at Auto Atlantic in Cape Town on the 18th March 1983, and is now being restored in Midrand. Thank you to Ulrich Thieme for valuable information, a lot more additional BMW E12 information can be found on his
www.e12.de website.