The Lloyd 400 was powered by an air-cooled twin cylinder two-stroke engine with a horizontal-flow Solex 30 BFRH carburetor.

The resulting engine capacity of 386cc provided for a maximum power output of 13 PS (9.6 kW) at 3,750 rpm.

The car was fueled using "regular" grade petrol/gasoline, mixed in the ratio of 25:1 with oil,[2] reflecting the requirements of the "motorbike-style" two-stroke engine.

When driven normally the Lloyd 400 consumed fuel significantly more frugally than West Germany's best selling small car, the Volkswagen.

[2] There were essentially three development phases for the Lloyd 400, and the first batch of cars was delivered with drum brakes of 180 millimetres (7.1 in) diameter, controlled via a cable linkage.

From March 1953, however, a hydraulic linkage mechanism was installed, and on cars produced after August 1955 the diameter of the brake drums was increased to 200 millimetres (7.9 in).

Its stripped down specification meant the removal of hub caps and bumpers, and there was no backrest for passengers in the back.

Body panels were bought in, delivered in bare-metal form to the Lloyd factory in Bremen for finishing, assembly and painting.

By September 1955, supported by that year's healthy sales volumes, and presumably in response to pressure from the market, the price of the LP400 was down to DM3,350, and the Kombi was offered at DM3,480.

[1][4] This enabled the Borgward Group to feature as West Germany's third largest automobile producer, behind only Volkswagen and Opel[1] (and ahead of Ford and Mercedes-Benz).