History of BMW

BMW (Bayerische Motoren Werke in German, or Bavarian Motor Works in English) is a German multinational company which currently produces luxury automobiles and motorcycles, and also produced aircraft engines until 1945.

The company was founded in 1916 and has its headquarters in Munich, Bavaria. BMW produces motor vehicles in Germany, Brazil, China, India, South Africa, the United Kingdom, and the United States. In 2015, BMW was the world’s twelfth largest producer of motor vehicles, with 2,279,503 vehicles produced.[2] The Quandt family are long-term shareholders of the company, with the remaining stocks owned by public float.

Automobiles are marketed under the brands BMW (with sub-brands BMW M for performance models and BMW i for plug-in electric cars), Mini and Rolls-Royce. Motorcycles are marketed under the brand BMW Motorrad.

The company has significant motorsport history, especially in touring cars, Formula 1, sports cars and the Isle of Man TT.

1916—1923: Aircraft engine production

BMW’s origins can be traced back to three separate German companies: Rapp Motorenwerke, Bayerische Flugzeugwerke and Automobilwerk Eisenach. The history of the name itself begins with Rapp Motorenwerke, an aircraft engine manufacturer. In April 1917, following the departure of the founder Karl Friedrich Rapp, the company was renamed Bayerische Motoren Werke (BMW).[3](p11). BMW’s first product was the BMW IIIa aircraft engine. The IIIa engine was known for good fuel economy and high-altitude performance.[4] The resulting orders for IIIa engines from the German military caused rapid expansion for BMW.

After the end of World War I in 1918, BMW was forced to cease aircraft-engine production by the terms of the Versailles Armistice Treaty.[5] To maintain in business, BMW produced farm equipment, household items and railway brakes. In 1922, former major shareholder Camillo Castiglioni purchased the rights to the name BMW, which led to the company descended from Rapp Motorenwerke being renamed Süddeutsche Bremse AG (known today as Knorr-Bremse). Castiglioni was also an investor in another aircraft company, called “Bayerische Flugzeugwerke”, which he renamed BMW.[6]
The disused factory of Bayerische Flugzeugwerke was re-opened to produce engines for buses, trucks, farm equipment and pumps, under the brand name BMW. BMW’s corporate history considers the founding date of Bayerische Flugzeugwerke (7 March 1916) to be the birth of the company.

1923—1939: Motorcycle and car production[edit]

BMW model 3/15PS (BMW Dixi) from 1930
As the restrictions of the Armistice Treaty began to be lifted, BMW began production of motorcycles in 1923,[7] with the R32 model.

BMW’s production of automobiles began in 1928, when the company purchased the Automobilwerk Eisenach car company. Automobilwerk Eisenach’s current model was the Dixi 3/15, a licensed copy of the Austin 7 which had begun production in 1927. Following the takeover, the Dixi 3/15 became the BMW 3/15, BMW’s first production car.[8][9][10]

In 1932, the BMW 3/20 became the first BMW automobile designed entirely by BMW. It was powered by a four-cylinder engine, which BMW designed based on the Austin 7 engine.

BMW’s first automotive straight-six engine was released in 1933, in the BMW 303. Throughout the 1930s, BMW expanded its model range to include sedans, coupes, convertibles and sports cars.

1939—1945: World War II[edit]

BMW 801 engine
With German rearmament in the 1930s, the company again began producing aircraft engines for the Luftwaffe. The factory in Munich made ample use of forced labour: foreign civilians, prisoners of war and inmates of the Dachau concentration camp.[11] Among its successful World War II engine designs were the BMW 132 and BMW 801 air-cooled radial engines, and the pioneering BMW 003 axial-flow turbojet, which powered the tiny, 1944–1945–era jet-powered “emergency fighter”, the Heinkel He 162 Spatz. The BMW 003 jet engine was first tested as a prime power plant in the first prototype of the Messerschmitt Me 262, the Me 262 V1, but in 1942 tests the BMW prototype engines failed on takeoff with only the standby Junkers Jumo 210 nose-mounted piston engine powering it to a safe landing.[12][13]

The few Me 262 A-1b test examples built used the more developed version of the 003 jet, recording an official top speed of 800 km/h (497 mph). The first-ever four-engine jet aircraft ever flown were the sixth and eighth prototypes of the Arado Ar 234 jet reconnaissance-bomber, which used BMW 003 jets for power. Through 1944 the 003’s reliability improved, making it a suitable power plant for air frame designs competing for the Jägernotprogramm’s light fighter production contract. which was won by the Heinkel He 162 Spatz design. The BMW 003 aviation turbojet was also under consideration as the basic starting point for a pioneering turboshaft powerplant for German armored fighting vehicles in 1944–45, as the GT 101.[14] Towards the end of the Third Reich, BMW developed some military aircraft projects for the Luftwaffe, the BMW Strahlbomber, the BMW Schnellbomber and the BMW Strahljäger, but none of them were built.[15][16]

1945—1959: Post-war rebuilding[edit]

BMW Isetta with a front opening door
During World War II, many BMW production facilities had been heavily bombed. BMW’s facilities in East Germany were seized by the Soviet Union and the remaining facilities were banned by the Allies from producing motorcycles or automobiles. During this ban, BMW used basic secondhand and salvaged equipment to make pots and pans, later expanding to other kitchen supplies and bicycles.

In 1947, BMW was granted permission to resume motorcycle production and its first post-war motorcycle – the R24 – was released in 1948. BMW was still barred from producing automobiles, however the Bristol Aeroplane Company (BAC) was producing cars in England based on BMW’s pre-war models, using plans that BAC had taken from BMW’s German offices.

Production of automobiles resumed in 1952, with the BMW 501 large sedan. Throughout the 1950s, BMW expanded their model range with sedans, coupes, convertibles and sports cars. In 1954, the BMW 502 was BMW’s first to use a V8 engine. To provide an affordable model, BMW began production of the Isetta micro-car (under licence from Iso) in 1955. Two years later, the four-seat BMW 600 was based on a lengthened version of the Isetta design. In 1959, the BMW 600 was replaced by the larger BMW 700 coupe/sedan.

1959—1968: Near bankruptcy and New Class[edit]

New Class sedan
By 1959, BMW was in debt and losing money.[17] The Isetta was selling well but with small profit margins.[18] Their 501-based luxury sedans were not selling well enough to be profitable and were becoming increasingly outdated.[19] Their 503 coupé and 507 roadster were too expensive to be profitable.[19] Their 600, a four-seater based on the Isetta, was selling poorly.[20] The motorcycle market imploded in the mid-1950s with increased affluence turning Germans away from motorcycles and toward cars.[21] BMW had sold their Allach plant to MAN in 1954.[22] American Motors and the Rootes Group had both tried to acquire BMW.[23]

At BMW’s annual general meeting on 9 December 1959, Dr. Hans Feith, chairman of BMW’s supervisory board, proposed a merger with Daimler-Benz. The dealers and small shareholders opposed this suggestion and rallied around a counter-proposal by Dr. Friedrich Mathern, which gained enough support to stop the merger.[18][23] At that time, the Quandt Group, led by half-brothers Herbert and Harald Quandt, had recently increased their holdings in BMW and had become their largest shareholder.[23] In 1960, the development program began for a new range of models, called the “Neue Klasse” (New Class) project. The resulting New Class four-door sedans, introduced in 1962, are credited for saving the company financially and establishing BMW’s identity as a producer of leading sports sedans.

In 1965, the New Class range was expanded with the 2000 C and 2000 CS luxury coupes. The range was further expanded in 1966 with the iconic BMW 02 Series compact coupes.

BMW acquired the Hans Glas company based in Dingolfing, Germany, in 1966. Glas vehicles were briefly badged as BMW until the company was fully absorbed. It was reputed that the acquisition was mainly to gain access to Glas’ development of the timing belt with an overhead camshaft in automotive applications,[24] although some saw Glas’ Dingolfing plant as another incentive. However, this factory was outmoded and BMW’s biggest immediate gain was, according to themselves, a stock of highly qualified engineers and other personnel.[25] The Glas factories continued to build a limited number of their existing models, while adding the manufacture of BMW front and rear axles until they could be closer incorporated into BMW.[26]

1968—1978: New Six, 3 Series, 5 Series, 7 Series[edit]

E9 3.0 CSL
In 1968, BMW began production of its first straight-six engine since World War II. This engine coincided with the launch of the New Six large sedans (the predecessor to the 7 Series) and New Six CS large coupes (the predecessor to the 6 Series).

The first 5 Series range of mid-size sedans were introduced in 1972, to replace the New Class sedans. The 5 Series platform was also used for the 6 Series coupes, which were introduced in 1976. In 1975, the first model of the iconic 3 Series range of compact sedans/coupes was introduced. The 7 Series large sedans were introduced in 1978.

1978—1989: M division[edit]

E30 M3
The 1978 BMW M1 was BMW’s first mid-engined sports car and was developed in conjunction with Lamborghini. It was also the first road car produced by BMW’s motorsport division, BMW M. In 1980, the M division produced its first model based on a regular production vehicle, the E12 M535i. The M535i is the predecessor to the BMW M5, which was introduced in 1985 based on the E28 plaftorm.

In 1983, BMW introduced its first diesel engine, the M21. The first all-wheel drive BMW – the E30 325iX – began production in 1985, and in 1987 the E30 was BMW’s first model produced in a wagon/estate body style.

The 1986 E32 750i was BMW’s first V12 model. The E32 was also the first sedan to be available with a long-wheelbase body style (badged “iL” or “Li”).

The BMW M3 was introduced in 1985, based on the E30 platform.

1989—1994: 8 Series, hatchbacks[edit]

E31 8 Series
The 8 Series range of large coupes was introduced in 1989 and in 1992 was the first application of BMW’s first V8 engine in 25 years, the M60. It was also the first BMW to use a multi-link rear suspension, a design which was implemented for mass-production in the 1990 E36 3 Series.

The E34 5 Series, introduced in 1988, was the first 5 Series to be produced with all-wheel drive or a wagon body style.

In 1989, the limited-production Z1 began BMW’s line of two-seat convertible Z Series models.

In 1993, the BMW 3 Series Compact was BMW’s first hatchback model (except for the limited production 02 Series “Touring” models). These hatchback models formed a new entry-level model range below the other 3 Series models.

In 1992, BMW acquired a large stake in California-based industrial design studio DesignworksUSA, which they fully acquired in 1995.

The 1993 McLaren F1 is powered by a BMW V12 engine.

1994—1999: Rover ownership, Z3[edit]

Z3 roadster
In 1994, BMW bought the British Rover Group[27] (which at the time consisted of the Rover, Land Rover, Mini and MG brands as well as the rights to defunct brands including Austin and Morris), and owned it for six years. By 2000, Rover was incurring huge losses and BMW decided to sell off several of the brands. The MG and Rover brands were sold to the Phoenix Consortium to form MG Rover, while Land Rover was taken over by Ford. BMW, meanwhile, retained the rights to build the new Mini, which was launched in 2001.

In 1995, the E38 725tds was the first 7 Series to use a diesel engine. The E39 5 Series was also introduced in 1995, and was the first 5 Series to use rack-and-pinion steering and a significant number of suspension parts made from lightweight aluminium.

The BMW Z3 two-seat convertible and coupe models were introduced in 1995. These were the first mass-produced models outside of the 1/3/5 Series and the first model to be solely manufactured outside Germany (in the United States, in this case).

In 1998, the E46 3 Series was introduced, with the M3 model featuring BMW’s most powerful naturally aspirated engine to date.

1999—2006: SUV models, Rolls-Royce[edit]

E53 X5
BMW’s first SUV, the BMW X5, was introduced in 1999. The X5 was a large departure from BMW’s image of sporting “driver’s cars”, however it was a very successful and resulted in other BMW X Series being introduced. The smaller BMW X3 was released in 2003.

The 2001 E65 7 Series was BMW’s first model to use a 6-speed automatic transmission.

In 2002, the Z4 two-seat coupe/convertible replaced the Z3. In 2004, the 1 Series hatchbacks replaced the 3 Series Compact models as BMW’s entry level models.

The 2003 Rolls-Royce Phantom was the first Rolls-Royce vehicle produced under BMW ownership. This was the end result of complicated contractual negotiations that began in 1998 when Rolls-Royce plc licensed use of the Rolls-Royce name and logo to BMW, but Vickers sold the remaining elements of Rolls-Royce Motor Cars to Volkswagen. In addition, BMW had supplied Rolls-Royce with engines since 1998 for use in the Rolls-Royce Silver Seraph.

In 2005, BMW’s first V10 engine was introduced in the E60 M5. The E60 platform is also used for the E63/E64, which reintroduced the 6 Series models after a hiatus of 14 years.

2006—2013: Shift to turbocharged engines[edit]

F01 ActiveHybrid 7
BMW’s first mass-production turbocharged petrol engine was the six-cylinder N54, which debuted in the 2006 E92 335i. In 2011, the F30 3 Series was released, with turbocharged engines being used on all models. This shift to turbocharging and smaller engines was reflective of general automotive industry trends. The M3 model based on the F30 platform is the first M3 to use a turbocharged engine.

BMW’s first turbocharged V8 engine, the BMW N63, was introduced in 2008. Despite the trend to downsizing, in 2008 BMW began production of its first turbocharged V12 engine, the BMW N74. In 2011, the F10 M5 became the first M5 model to use a turbocharged engine.

In 2007, the production rights for Husqvarna Motorcycles was purchased by BMW for a reported 93 million euros.

The BMW X6 SUV was introduced in 2008. The X6 attracted controversy for its unusual combination of coupe and SUV styling cues.

In 2009, the BMW X1 compact SUV was introduced. The BMW 5 Series Gran Turismo fastback body style was also introduced in 2009, based on the 5 Series platform.

Controversial designer Chris Bangle announced his departure from BMW in February 2009, after serving on the design team for nearly seventeen years.[28]

BMW’s first hybrid-powered car, the F01 ActiveHybrid 7, was introduced in 2010.

2013—present: Electric/hybrid power[edit]

i8
BMW released their first electric car, the BMW i3 city car, in 2013. The i3 is also the first mass-production car to have a structure mostly made from carbon-fibre. BMW’s first hybrid sportscar (and their first mid-engined car since the M1) is called the BMW i8 and was introduced in 2014. The i8 is also the first car to use BMW’s first inline-three engine, the BMW B38.

In 2013, the BMW 4 Series replaced the coupe and convertible models of the 3 Series. Many elements of the 4 Series remained shared with the equivalent 3 Series model. Similarly, the BMW 2 Series replaced the coupe and convertible models of the 1 Series in 2013. The 2 Series was produced in coupe (F22), five-seat MPV (F45) and seven-seat MPV (F46) body styles. The latter two body styles are the first front-wheel drive vehicles produced by BMW. The F48 X1 also includes some front-wheel drive models.

The BMW X4 compact SUV was introduced in 2014.

The 2016 G11 740e and F30/F31 330e are the first plug-in hybrid versions of the 7 Series and 3 Series respectively.

Company name and logo[edit]

BMW badge on a 1931 Dixi

Flag of Bavaria
The name BMW is an abbreviation for Bayerische Motoren Werke (German pronunciation: [ˈbaɪ̯ʁɪʃə mɔˈtʰɔʁn̩ ˈvɛɐ̯kə] (About this sound listen)). The German name is not grammatically correct, because motorenwerke is a single word in German. The term Bayerische Motorenwerke (which has been used in several German publications and advertisements in the past[29][30]) translates into English as Bavarian Motor Works, which has been used by BMW for marketing products in English-speaking countries.[31] The suffix AG, short for Aktiengesellschaft, signifies an incorporated entity which is owned by shareholders.

The terms Beemer, Bimmer and Bee-em are commonly used slang for BMW in the English language[32][33] and are sometimes used interchangeably for cars and motorcycles.[34][35]

In the United States, some people prescribe that “beemer” should be used specifically for motorcycles and “bimmer” should be used for cars.[36][37][38][39][40][41] Some of these people claim that “true aficionados” make this distinction[42] and those who don’t are “uninitiated.”[43] Usage in North American mainstream media also varies, for example the Canadian Globe and Mail prefers Bimmer and calls Beemer a “yuppie abomination”,[44] and the Tacoma News Tribune says that it is “auto snobs” who use the terms to distinguish between cars and motorcycles.[45]

The circular blue and white BMW logo or roundel evolved from the circular Rapp Motorenwerke company logo, from which the BMW company grew, combined with the blue and white colors of the flag of Bavaria.[46] The BMW logo still used today was created in 1917, albeit with various minor styling changes.[47]

The origin of the logo is often thought to be a portrayal of the movement of an aircraft propeller with the white blades cutting through a blue sky. However, this portrayal was first used in a BMW advertisement in 1929 – twelve years after the logo was created – so this is not the origin of the logo itself.[48]

Motorcycles[edit]
See also: BMW Motorrad and History of BMW motorcycles

The R32 motorcycle, the first BMW motor vehicle.

The 2015 BMW R1200RT
BMW began production of motorcycle engines and then motorcycles after World War I.[49] Its motorcycle brand is now known as BMW Motorrad. Their first successful motorcycle after the failed Helios and Flink, was the “R32” in 1923, though production originally began in 1921.[50] This had a “boxer” twin engine, in which a cylinder projects into the air-flow from each side of the machine. Apart from their single-cylinder models (basically to the same pattern), all their motorcycles used this distinctive layout until the early 1980s. Many BMW’s are still produced in this layout, which is designated the R Series.

The entire BMW Motorcycle production has, since 1969, been located at the company’s Berlin-Spandau factory.

During the Second World War, BMW produced the BMW R75 motorcycle with a sidecar attached. Having a unique design copied from the Zündapp KS750, its sidecar wheel was also motor-driven. Combined with a lockable differential, this made the vehicle very capable off-road, an equivalent in many ways to the Jeep.

In 1982, came the K Series, shaft drive but water-cooled and with either three or four cylinders mounted in a straight line from front to back. Shortly after, BMW also started making the chain-driven F and G series with single and parallel twin Rotax engines.

In the early 1990s, BMW updated the airhead Boxer engine which became known as the oilhead. In 2002, the oilhead engine had two spark plugs per cylinder. In 2004 it added a built-in balance shaft, an increased capacity to 1,170 cc and enhanced performance to 100 hp (75 kW) for the R1200GS, compared to 85 hp (63 kW) of the previous R1150GS. More powerful variants of the oilhead engines are available in the R1100S and R1200S, producing 98 and 122 hp (73 and 91 kW), respectively.

In 2004, BMW introduced the new K1200S Sports Bike which marked a departure for BMW. It had an engine producing 167 hp (125 kW), derived from the company’s work with the Williams F1 team, and is lighter than previous K models. Innovations include electronically adjustable front and rear suspension, and a Hossack-type front fork that BMW calls Duolever.

BMW introduced anti-lock brakes on production motorcycles starting in the late 1980s. The generation of anti-lock brakes available on the 2006 and later BMW motorcycles pave the way for the introduction of electronic stability control, or anti-skid technology later in the 2007 model year.

BMW has been an innovator in motorcycle suspension design, taking up telescopic front suspension long before most other manufacturers. Then they switched to an Earles fork, front suspension by swinging fork (1955 to 1969). Most modern BMWs are truly rear swingarm, single sided at the back (compare with the regular swinging fork usually, and wrongly, called swinging arm). Some BMWs started using yet another trademark front suspension design, the Telelever, in the early 1990s. Like the Earles fork, the Telelever significantly reduces dive under braking.

BMW Group, on 31 January 2013, announced that Pierer Industrie AG has bought Husqvarna for an undisclosed amount, which will not be revealed by either party in the future. The company is headed by Stephan Pierer (CEO of KTM). Pierer Industrie AG is 51% owner of KTM and 100% owner of Husqvarna.

BMW AG originated with three other manufacturing companies, Rapp Motorenwerke and Bayerische Flugzeugwerke (BFw) in Bavaria, and Fahrzeugfabrik Eisenach in Thuringia. The company is now known as BMW or Bayerische Motoren Werke. Aircraft engine manufacturer Rapp Motorenwerke became Bayerische Motorenwerke in 1916. The engine manufacturer, which built proprietary industrial engines after World War I, was then bought by the owner of BFw who then merged BFw into BMW and moved the engine works onto BFw’s premises. BFw’s motorcycle sideline was improved upon by BMW and became an integral part of their business.

BMW became an automobile manufacturer in 1929 when it purchased Fahrzeugfabrik Eisenach, which, at the time, built Austin Sevens under licence under the Dixi marque.[1] BMW’s team of engineers progressively developed their cars from small Seven-based cars into six-cylinder luxury cars and, in 1936, began production of the BMW 328 sports car. Aircraft engines, motorcycles, and automobiles would be BMW’s main products until World War II. During the war, against the wishes of its director Franz Josef Popp, BMW concentrated on aircraft engine production, with motorcycles as a side line and automobile manufacture stopped altogether.

After the war, BMW survived by making pots, pans, and bicycles until 1948, when it restarted motorcycle production. Meanwhile, BMW’s factory in Eisenach fell in the Soviet occupation zone and the Soviets restarted production of pre-war BMW motorcycles and automobiles there. This continued until 1955, after which they concentrated on cars based on pre-war DKW designs. BMW began building cars in Bavaria in 1952 with the BMW 501 luxury saloon. Sales of their luxury saloons were too small to be profitable, so BMW supplemented this with building Isettas under licence. Slow sales of luxury cars and small profit margins from microcars caused the BMW board to consider selling the operation to Daimler-Benz. However, Herbert Quandt was convinced to purchase a controlling interest in BMW and to invest in its future.

Quandt’s investment, along with profits from the BMW 700, brought about the BMW New Class and BMW New Six. These new products, along with the absorption of Hans Glas GmbH, gave BMW a sure footing on which to expand. BMW grew in strength, eventually acquiring the Rover Group for the Mini brand before selling it to the Phoenix Group, and the license to build automobiles under the Rolls-Royce marque.

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Gustav Otto Flugmaschinenfabrik[edit]
Main article: Otto Flugmaschinenfabrik

Helios motorcycle built by BFw before the merger with BMW. The M2B15 engine was supplied by BMW

Advertisement for BFw in 1916
Origin and history of BMW to the end of World War I[edit]
Rapp Motorenwerke[edit]
In 1913, Karl Rapp established Rapp Motorenwerke near the Oberwiesenfeld.[2] Rapp had chosen the site because it was close to Gustav Otto Flugmaschinenfabrik, with whom he had contracts to supply his four-cylinder aircraft engines.[2]

Rapp was sub-contracted by Austro-Daimler to manufacture their V12 aircraft engines. Austro-Daimler at the time was unable to meet its own demands to build V12 Aero engines. The officer supervising aero-engine building at Austro-Daimler on behalf of the Austrian government was Franz Josef Popp. When it was decided to produce Austro-Daimler engines at Rapp Motorenwerke, Popp was delegated to Munich from Vienna to supervise engine quality.[2]

Popp did not restrict himself to the role of observer, becoming actively involved in the overall management of the company. On 7 March 1916, Rapp Motorenwerke became Bayerische Motoren Werke GmbH.[3]

Bayerische Motoren Werke GmbH 1917[edit]

BMW IIIa engine
For the small BMW business, the large orders received from the Reichswehr for the BMW IIIa engine were overwhelming. Under Karl Rapp, only a small number of engines had been produced and the manufacturing facilities were not in any way adequate to handle the mass production now required. Not only did BMW lack suitable machine tools but, to a very large degree, skilled manpower as well. However, the most serious drawback was in the small and aging workshops. Nevertheless, under the state-controlled war economy, officials in the relevant ministries were able to give BMW extensive practical support.[4] So in a short time BMW got the skilled workers and machinery it needed. In addition, the Munich company received a high level of financial assistance, which enabled it to build a completely new factory from the ground up, in the immediate vicinity of the old workshops. Due to the share capital being too small, both the building of the new plant and the working capital needed for materials and wages had to be financed with external funds, i.e. bank loans or state assistance. The war ministries of Bavaria and Prussia (then both separate kingdoms within the Kaiser’s Empire) did not, however, wish to go on supporting BMW with loans and guarantees, and therefore urged the flotation of a public limited company.[5]

BMW logo[edit]

BMW roundel on a 1939 BMW motorcycle
The name-change to Bayerische Motoren Werke compelled management to devise a new logo for the company, therefore the famous BMW trademark is designed and patented at this time. However, they remained true to the imagery of the previous Rapp Motorenwerke emblem (which was designed by Karl’s brother, Ottmar Rapp). Thus, both the old and the new logo were built up in the same way: the company name was placed in a black circle, which was once again given a pictorial form by placing a symbol within it. By analogy with this, the blue and white panels of the Bavarian national flag were placed at the center of the BMW logo. Not until the late 1920s was the logo lent a new interpretation as representing a rotating propeller.[6]

BMW AG[edit]
In 1917, Karl Rapp’s son-in-law, Max Wiedmann, held about 80 percent of the shares in Rapp Motorenwerke. He had obtained most of these shares from his father-in- law in 1914 and had thus become a figure of great influence in the business. Even after the name-change to Bayerische Motoren Werke GmbH, Wiedmann remained the principal shareholder in the company. Wiedmann’s capitulation in July 1918 opened the way for the founding of a public limited company. On 13 August 1918, BMW AG was entered as a new company in the Commercial Register and took over from BMW GmbH all its manufacturing assets, order book and workforce.[7] The old BMW GmbH was renamed “Maschinenwerke Schleißheimerstrasse” and was wound up on 12 November 1918. The share capital of BMW AG amounting to 12 million reichsmarks was subscribed by three groups of investors. One third of the shares was taken up in equal parts by the Bayerische Bank and the Norddeutsche Bank. A further third of the shares (worth 4 million reichsmarks) was acquired by the Nuremberg industrialist, Fritz Neumeyer. This ensured that 50 percent of the capital (6 million reichsmarks) was in the hands of Bavarian businesses or banks. The Bavarian government placed the highest value on this strong local shareholding. The final one-third of the BMW shares were taken up by a Viennese financier, Camillo Castiglioni.[4]

First crisis for BMW AG – WWI aftermath[edit]
Winter 1918 factory closure[edit]

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In order to enable companies to resume civil production as rapidly as possible, a central demobilization office was set up as soon as the war was over, and branches opened right across Germany. The Commissioner for Demobilization with responsibility for Bavaria ordered the closure of BMW’s Munich plant with effect from 6 December 1918.[4]

Return of Castiglioni and merger with BFw[edit]
On 20 May 1922, Castiglioni bought the BMW name and engine-building business from Knorr-Bremse for 75 million reichsmarks. The remainder of the company became a subsidiary of Knorr-Bremse and was renamed Süddeutsche Bremse AG.[8]

Castiglioni did not purchase BMW’s premises in his transaction with Knorr-Bremse. Instead, he merged his Bayerische Flugzeugwerke (BFw) into BMW and established BMW’s factory and headquarters at BFw’s premises. BMW was moved into the same buildings of Gustav Otto’s former Otto-Flugzeugwerke on Lerchenauer Straße 76. BMW’s headquarters have been at that address ever since.[2][8][9][10]

Automobiles[edit]
Austin-licensed BMW Dixi[edit]

BMW’s first automobile, the BMW Dixi
In 1928, BMW bought the Eisenach-based Dixi Automobil Werke AG from Gothaer Waggonfabrik. Dixi’s sole product at the time of the purchase was the 3/15 PS, a licensed copy of the Austin 7, production of which had begun in 1927. The Dixi 3/15 became the BMW 3/15, BMW’s first production car, upon the absorption of Dixi Werke into BMW.[11]

BMW designs its own cars[edit]
Towards the end of 1930, BMW attempted to introduce a new front axle with independent wheel suspension for both their models, the BMW ‘Dixi’ 3/15 DA4 and BMW ‘Wartburg’ DA3, but this resulted in accidents with the prototypes because of construction faults.[12]

Six-cylinder cars[edit]
In 1933, BMW introduced the 303.[13][14] Larger and more conventional than the AM-series 3/20, the 303 used BMW’s new M78 engine, making it the first BMW automobile to use a straight-six engine.[14][15] The 303 was also the first BMW to use the “kidney grille” that would become a characteristic of BMW styling.[16] The 303 formed the basis for the four-cylinder 309 and the larger-engined 315 and 319,[17][18] while the 303 chassis supported the 315/1 and 319/1 roadsters[17][19] and the restyled 329.[20]

The 303 platform was supplemented and later supplanted by the 326, a larger car with a more rigid frame. Introduced in 1936, the 326 was BMW’s first four-door sedan.[21][22] A shortened version of the 326 frame was used in the 320, which replaced the 303-framed 329, in the 321, which replaced the 320, and in the 327 coupé.[23][24]

The 328 replaced the 315/1 and 319/1 roadsters in 1936. Unlike the 303-based 315/1 and 319/1, the 328 had a purpose-built frame.[20] While the 315/1 and 319/1 had M78 engines in a higher state of tune than in the respective 315 and 319 sedans,[25] the 328’s M328 engine had a specially-designed hemispheric cylinder head and other modifications that brought its power to 80 PS (59 kW).[26] From its introduction at the Eifelrennen race at the Nürburgring in 1936, where Ernst Henne drove it to win the 2.0 litre class,[20][27] to the overall victory of Fritz Huschke von Hanstein at the 1940 Brescia Grand Prix during World War II,[28][29] the 328 was a legendary performer, with more than 100 class wins in 1937 alone.[30]

An extended version of the 326’s frame was used in the 335, a luxury car with the 3.5 litre M335 engine.[31] The 335 was built from 1939 to 1941.[32]

World War II[edit]

BMW 801 radial engine
The German invasion of Poland and commencement of hostilities meant that manufacturing facilities in Germany were directed by the Nazi regime to re-focus on the manufacture of products required to support the war effort. In 1939, BMW bought Spandau-based Brandenburgische Motorenwerke, also known as Bramo, from the Siemens group of companies and merged it with its aircraft engine division under the name BMW Flugmotorenbau GmbH. A new factory at Allach, outside Munich, began production of aircraft engines later that year.[33]

BMW R75 military sidecar outfit

BMW 003 jet engine
A wide range of aero engines was ultimately produced for the Luftwaffe, including one of the most powerful engines of the time – the BMW 801. Over 30,000 aero engines were manufactured through 1945, as well as over 500 jet engines such as the BMW 003. To enable this massive production effort, forced labor was utilized, consisting primarily of prisoners from concentration camps such as Dachau.[34] By the end of the war, almost 50% of the 50,000-person workforce at BMW AG consisted of prisoners from concentration camps.[35] BMW also developed some military aircraft projects for the Luftwaffe towards the last phase of the Third Reich, the BMW Strahlbomber, the BMW Schnellbomber and the BMW Strahljäger, but none of them were built.[36]

Second crisis for BMW AG – WWII aftermath[edit]

R24 motorcycle
BMW AG was heavily bombed towards the end of the war, reducing most of the company’s production facilities to rubble. In fact, by the end of the war, the Munich plant was completely destroyed.[37] BMW sites in eastern Germany (Eisenach-Dürrerhof, Wandlitz-Basdorf and Zühlsdorf) were seized by the Soviets.

After the war the Munich factory took some time to restart production in any volume. BMW was banned from manufacturing motor vehicles by the Allies. During this ban, BMW used basic secondhand and salvaged equipment to make pots and pans, later expanding to other kitchen supplies and bicycles. Permission to manufacture motorcycles was granted to BMW by United States authorities in 1947, and production of the R24 began in 1948.[38]

East German 340 with BMW badge
In the east, the company’s factory at Eisenach was taken over by the Soviet Awtowelo group.[38][39] Production of the R35 motorcycle was restarted in 1945,[39] with the 321 automobile following late that year.[40][39] A mildly revised 327 entered production in 1948, followed by the 326-based 340 in 1949. These were sold under the BMW name with the BMW logo affixed to them.[41] To protect its trademarks, BMW AG legally severed its Eisenach branch from the company. Awtowelo continued production of the 327 and 340 under the Eisenacher Motorenwerk (EMW) brand with a red and white version of the logo until 1955.[38]

1948 Bristol 400 with double-kidney grille
In the west, the Bristol Aeroplane Company (BAC) inspected the factory, and returned to Britain with plans for the 327 model and the six-cylinder engine as official war reparations. Bristol then employed BMW engineer Fritz Fiedler to lead their engine development team. In 1947, the newly formed Bristol Cars released their 400 coupé, a lengthened version of the BMW 327. that featured BMW’s double-kidney grille.[42]

While Alfred Böning had returned to BMW and developed the R24[38] and Fritz Fiedler had gone to work for Bristol,[42] Alex von Falkenhausen and Ernst Loof had each started companies that built sports cars and racing cars. Von Falkenhausen started Alex von Falkenhausen Motorenbau (AFM), while Loof, in partnership with Georg Meier and Lorenz Dietrich, started Veritas. AFM and Veritas both competed in Formula 2, but both companies had shut down operations by 1954, when both von Falkenhausen and Loof went back to BMW.[43][44]

Three approaches to car manufacture[edit]

1951 BMW 331 prototype
By the end of the 1940s BMW had returned to motorcycle manufacture but still had not restarted automobile manufacture.[45] Kurt Donath, technical director of BMW and general manager of the Milbertshofen factory,[40] solicited manufacturers, including Ford and Simca, to produce their vehicles under licence. In particular, Donath was looking to produce old models under licence, so that he could buy tooling along with the licence.[46]

While Donath was trying to find a car to build under licence, chief engineer Alfred Böning developed a prototype for a small economy car powered by a motorcycle engine. Called the BMW 331, the prototype used a 600 cc motorcycle engine, a four-speed gearbox, and a live rear axle. The body was designed by Peter Schimanowski and resembled a BMW 327 in miniature.[46]

1954 BMW 502 V8 Super
The BMW 331 was proposed for production to the management, where it was vetoed by sales director Hanns Grewenig. Grewenig, a banker and former Opel plant manager, believed that BMW’s small production capacity was best suited to luxury cars with high profit margins, similar to the cars BMW made just before the war. To this end, he had Böning and his team design the 501.[47]

When the 501 was introduced in 1951, its cost of approximately DM15,000 was about four times the average German’s earnings.[48] It was also much heavier than expected and underpowered with a development of BMW’s pre-war two litre six.[48][49] Delays in receiving and setting up equipment caused production of the 501 to be delayed until late 1952,[48][50] with body construction, originally expected to be done in-house, being done by Karosserie Baur in Stuttgart for more than a year.[50]

In 1954, the 501 was given an improved, more powerful version of its six-cylinder engine and split into two models, the 501A at basically the same trim level and a price reduction of DM1,000, and a decontented 501B at a further price reduction of DM1,000 below the 501A’s price.[51][52] In addition, the 502, basically a 501 with an even higher trim level[51][52] and a 2.6 L aluminium V8 engine[51][53] designed by Bőning and Fiedler,[54] was introduced to lead BMW’s luxury sedan range.[51][52] The expanded line for 1954 doubled the sales of BMW’s luxury cars.[52]

1956 BMW 507
Influenced by the public response to the introduction of Mercedes-Benz’s 300SL and 190SL show cars at the International Motor Sports Auto Show in New York in February 1954, the management of BMW approved Grewenig’s proposal to build a sports car based on the 502.[55] Preliminary design sketches were seen by U.S. importer Max Hoffman, who suggested to industrial designer Albrecht von Goertz that he should submit design proposals to BMW’s management as an alternative. Based on these proposals, BMW contracted the design of the sports car and a four-seat grand tourer to von Goertz in November 1954.[56] The 507 roadster was introduced at the Waldorf-Astoria Hotel in New York in the summer of 1955,[57][58] while the 503 four-seater was introduced in September of that year at the Frankfurt Motor Show.[56]

Hoffman told BMW that he would order 2000 507s if he could sell them for US$5,000 each. When the selling price was given as about twice that, and higher than the 300SL, he withdrew his offer.[59][60] 412 units of the 503 and 253 of the 507 were built during their production runs from 1956 (May for the 503, November for the 507) to March 1959.[60][61][62]

BMW Isetta Moto Coupe
Motorcycles were BMW’s largest money earner at the time, and their sales had peaked in 1954. Germans were turning away from mopeds and motorcycles toward light automobiles such as the Messerschmitt and the Goggomobil. Eberhard Wolff, BMW’s head of automotive development, saw the Iso Rivolta Isetta bubble car at the 1954 Geneva Motor Show and suggested to his managers the possibility of building the Isetta under licence.[63][64] BMW entered talks with Iso Rivolta and bought both a licence to manufacture the Isetta and all the tooling needed to manufacture its body.[64][65] Production of BMW’s version of the Isetta began in 1955; more than ten thousand Isettas were sold that year.[65] BMW made more than a hundred thousand Isettas by the end of 1958,[66] and a total of 161,728 by the end of production in 1962.[67]

BMW 600
BMW knew that it needed a four-seat family car to keep up with the rising wealth and expectations of the German people, but it could not access funding to develop a new car for this market. They therefore developed the 600, a four-seat car based on the Isetta. The 600 used the front suspension, the front seats, and the front-mounted door from the Isetta, but used a new, longer ladder frame with a longer, four-seat body, a rear-mounted 0.6 L flat-twin motorcycle engine, and a full-width rear track. The 600’s rear suspension was BMW’s first use of the semi-trailing arm system that would be used on their sedans and coupes until the 1990s. Released in 1957, the 600 could not compete against the larger, more powerful Volkswagen Beetle. Production ended in 1959 after fewer than 35,000 were built.[68][69][70]

Third crisis for BMW AG – a company for sale[edit]

BMW 700
By 1959, BMW was in debt and losing money.[71] The Isetta was selling well but with small profit margins.[72] Their 501-based luxury sedans were not selling well enough to be profitable and were becoming increasingly outdated.[73] Their 503 coupé and 507 roadster were too expensive to be profitable.[73] Their 600, a four-seater based on the Isetta, was selling poorly.[68] The motorcycle market imploded in the mid-1950s with increased affluence turning Germans away from motorcycles and toward cars.[74] BMW had sold their Allach plant to MAN in 1954.[75] American Motors and the Rootes Group had both tried to acquire BMW.[76]

At BMW’s annual general meeting on 9 December 1959, Dr. Hans Feith, chairman of BMW’s supervisory board, proposed a merger with Daimler-Benz. The dealers and small shareholders opposed this suggestion and rallied around a counter-proposal by Dr. Friedrich Mathern, which gained enough support to stop the merger.[72][76] At that time, the Quandt Group, led by half-brothers Herbert and Harald Quandt, had recently increased their holdings in BMW and had become their largest shareholder.[76] By the end of November 1960, the Quandts owned two-thirds of BMW’s stock between them.[71]

By this time BMW had launched the 700, a small car with an air-cooled, rear-mounted 697 cc boxer engine derived from the engine powering the R67 motorcycle. It was available as a 2-door sedan and as a coupe, both versions having been designed by Giovanni Michelotti.[77] There was also a more powerful RS model for racing.[78]

At the Frankfurt Motor Show in 1961, BMW launched the 1500, a compact sedan with front disc brakes and four-wheel independent suspension.[79] This modern specification further cemented BMW’s reputation for sporting cars. It was the first BMW to officially feature the “Hofmeister kink”, the rear window line that has been the hallmark of all BMWs since then.[citation needed]

The “New Class” 1500 was developed into 1600 and 1800 models.[80] In 1966, the two-door version of the 1600 was launched, along with a convertible in 1967. These models began the ’02’ series, of which the 2002 was the best known, and which was continued until 1976 when it was replaced by the BMW 3 Series.[81]

By 1963, with the company back on its feet, BMW offered dividends to its shareholders for the first time since World War II.[82]

München, BMW Autowerk, 1968
Rover[edit]

The Rover 75, the only new Rover released under BMW
Between 1994 and 2001, under the leadership of Bernd Pischetsrieder, BMW owned the British Rover Group, having bought it from British Aerospace. This brought the active Rover, Mini and Land Rover brands as well as rights to many dormant marques such as Austin, Morris, Riley, Triumph and Wolseley under BMW ownership.

The venture was not successful. Already struggling after years of industrial disputes, Rover had a poor reputation but in trying to improve its image it would become a rival to the BMW market segment. BMW found it difficult to reposition the English automaker alongside its own products and the Rover division was faced with endless changes in its marketing strategy. In the six years under BMW, Rover was positioned as a premium automaker, a mass-market automaker, a division of BMW and an independent unit. A five-part BBC documentary, When Rover Met BMW (1996), gave some insight into the difficulties faced by the two firms.[83]

It is possible that some development work on the Rover R30 model may have eventually benefitted the BMW 1 Series.[84]

Controversial BMW 7 Series (E65) “Bangle butt”[85]
Production outside Germany[edit]
BMW signed an agreement in 1999 with Avtotor to produce cars in Kaliningrad, Russia. The Factory has been assembling 3 and 5 -series cars.[86]

Starting from October 2004, BMWs intended for the Chinese market are produced in Shenyang, China.[87] BMW has established a joint venture with Chinese manufacturer Brilliance to build BMW 3 Series and 5 Series that have been modified for the needs of local markets.

The BMW X3 was manufactured in Graz, Austria between 2004 and 2007 by Magna Steyr with mainly German components. The X3 production will be moved to the Spartanburg plant due in part to high production and transportation costs of what was meant to be the “more affordable” SUV. North American pricing, after said costs, were nearly on par with the larger, American-built X5.[88]

In 2005, BMW Group built a new manufacturing facility in Egypt. This plant builds 3 Series, 5 Series, 7 Series, and X3 vehicles for the African and Middle East markets.

BMW opened its first assembly plant in Chennai, India in March 2007 to assemble 3-series and 5-series vehicles. The 20 Million Euro plant aims to produce 1,700 cars per year in, unveiled on January 2, 2003, and officially launched at the Detroit Auto Show on January 5, 2003. The model, priced around US$330,000, has experienced record sales worldwide of 796 Phantoms sold in 2005. Rolls-Royce Motor Cars, BMW’s subsidiary manufacturing Rolls-Royces, has since launched the Rolls-Royce Ghost.