Schnitzer established their racing operation in Freilassing in 1967, initially specializing in BMWs, and had secured the 1975 European Formula Two title with Jacques Laffite. Their relationship with Toyota began in late 1976, when they prepared rallying engines for factory Toyotas. Recognizing the potential of turbocharging for the Celica’s TRD 152E engine, Schnitzer presented this idea to Ove Andersson, head of motorsport operations for Toyota Europe, and Adolf Hüngsberg, head of press at Toyota Deutschland, to promote their cars in Germany. A budget of one million Deutsche Mark was set by Nobuji Araki, president of Toyota Germany and vice president overall, for the 1977 season. Sponsorship was provided by optical manufacturer Rodenstock at 10,000 DM per race.
Development began on March 26, 1977, with a dark green 3-door liftback TA28 Toyota Celica ST arriving at Schnitzer’s workshop. The car was disassembled for modifications, retaining its hood, roof, doors, and rail panel, and fitted with lightweight fiberglass bodywork. The Celica featured wider body sills and a sloping nose, and was the lowest-profile car in the championship, sitting 20 cm lower and 25 cm shorter than a BMW 2002. A white liftback was provided by Toyota Deutschland for modelling work and later used as a donor car. Schnitzer built the car to keep auxiliary components away from the engine, with engine changes reportedly taking 30 minutes. As reported by Auto Motor und Sport, a 1421cc engine was said to be built for Division 2, producing 380 hp. The engine produced a total output of 560 hp (418 kW) from its bored 2,090 cc (127.5 cu in) engine.
In 1977, driven by Harald Ertl, the blue Celica debuted at the Hockenheimring, supporting the German Grand Prix, but retired after four laps. Competition was strong from numerous Porsche 935s. It also retired from the Zolder round after three laps. At the final round at Nürburgring, it finished fourth behind three privateer Porsche 935s. The Celica returned to Zolder for a non-championship ADAC Trophy, where it scored its only victory.
For the 1978 season, the Celica’s color scheme was changed to red and white, reflecting the corporate colors of new main sponsor Kathrein, while Rodenstock continued their sponsorship. Rolf Stommelen, a defending champion with Gelo Racing, took over driving duties from Ertl. At Zolder, the Celica retired due to engine failure on its second lap. At the Nürburgring round, it retired after four laps. At the 1000 km Nürburgring, Stommelen partnered with Ertl, qualifying sixth but retiring in both 500 km heats due to technical defects, including a broken spark plug connector. They finished eighth at Mainz Finthen, the highest finishing non-935 car in the race.
Josef Schnitzer was involved in a road accident en route to a DRM round at Zolder and died two weeks later from his injuries at the age of 37. Following this, Sepp Schnitzer, his brother, pulled the plug on the project and focused exclusively on BMWs.
After its European career, the Celica was sold to Nobuhide Tachi of TOM'S for competition in the newly enacted Fuji Super Silhouette series in Japan. Tachi altered the car’s layout, connecting the gearbox and engine to shorten the driveshaft, addressing issues with the original Schnitzer design. The car won a race in its third outing, but lacked the works support enjoyed by Nissan. Dome developed a new chassis around the Celica’s 152E engine, intended for Le Mans, and also built a TE71 Corolla G5 for TOM'S to race at Macau.
The original Celica was later sold to Trust Japan in 1981, reverting the nose to the original Schnitzer configuration. Under Kaoru Hoshino, it achieved a ninth-place finish at Fuji, followed by third and eighth. In 1982, Hoshino retired in two races, and Tatsuhiko Kaneumi finished fifth at Tsukuba Circuit. In 1983, the car was retired in favour of a Porsche 956, but resurfaced for a final ninth-place finish at Tsukuba. The car was later discovered in a junkyard in Japan in a neglected state with its Trust color scheme.
Tamiya released static plastic model kits in 1/20 and 1/24 scale, with the 1/24 version being re-released several times. Tamiya also produced 1/12 and 1/10 scale radio controlled car kits. Bburago made a 1/24 scale toy model with a metal body, and MRRC produced 1/32 scale slotcars in different liveries, including a promotional "GSR" livery.