This is the optional extra Surprise Drive and it should be accompanied by the car making a sort 'Oh' sound! What a bizarre fault. No idea save to check the linkage on the selector assembly.
Many of these small cars have a axle transfer box which has a gear for forward and chain drive for reverse. A dog selector shuttles between.
Messerschmitt set, Goggo Dart, Heinkel 175, Fiat Jolly, Autobianchi Cabrio
MG ZB Varitone, Wolseley 4/44, Borgward, Saab 96s, Bellamy, Isuzu Trooper, Citroen BX 17TZD pair, GTI 16v
Selling - Vellam Isetta, Bamby, AC Type 70, Velorex, Church Pod 1, Reliant Mk5, KR200, BX 14 E, 16 TRS Auto, 19 TXD Es