The consortium was formed in 1959 by the German aircraft companies Bölkow, Heinkel and Messerschmitt to develop a Mach 2 VTOL interceptor for the German Air Force. In 1964 Heinkel left the consortium and the following year it was formed as a company Entwicklungsring Süd GmbH. A VJ 101C prototype aircraft was built and flown in 1963 although it crashed on its 132nd flight, on 14 September 1964, during a normal horizontal take-off. The accident was found to have been caused by a roll-rate gyro which had been installed with reversed polarity. A modified second prototype flew in 1965 and it was planned to put an improved variant VJ 101D into production, but the development was stopped.