BMW was founded originally as Rapp Motor by Karl Friedrich Rapp. Under contract to Austro-Daimler, the company began making V12 engines, and Rapp Motor became Bayerische Motoren Werke GmbH in 1917. Complications led to a takeover by Franz Josef Popp and the company was renamed BMW AG in 1918.
In 1920, the company diversified into motorcycle engines, due to a prohibition on aircraft manufacture under the Treaty of Versailles, before making its own motorcycles from 1921. In 1928, BMW bought Automobilwerk Eisenach, which was manufacturing a Dixi model under licence from Austin (it was a version of the 7), related to the US Bantam and the Japanese Datsun. It was briefly renamed the BMW Dixi.
With its München factory largely destroyed and with restrictions imposed by the Allies, car production did not resume till 1952. In the meantime, Eisenach had been taken over by the Soviets and offered BMWs for sale till 1951. In 1952, BMW successfully prevented its trade marks from being used by Eisenach when the company was transferred by the Soviets to the East German government. (The last BMWs made there were branded EMW.) Reparations saw the 326, 327 and 328 models go to Bristol in the UK.
BMW’s 1950s’ record is less distinguished. While it created exotic models such as the 507, arguably one of its most famous vehicles, they were low-volume, and it produced the Isetta bubble car under licence.
In 1959, financier Herbert Quandt became a shareholder, later the majority shareholder. BMW had almost been sold to Daimler-Benz AG, but opposition from the workforce and trade unions, and advice from the chairman, Kurt Golda, prevented this. Quandt prompted the reorganization of the firm.
The 700, launched the same year, featured a Michelotti-designed body and the 697 cm³ engine from the R67 motorcycle. It was a hit, and BMW continued with the 1500 in 1961, developed by Hofmeister, Fiedler, Wolff and von Falkenhausen. This car set the template for modern BMWs as a sporting saloon, with the 1600, 1800 and 02 series following. A three-tiered saloon range fell into place by 1972 with the launch of the 5er-Reihe, and these three model lines have formed the basis of BMW’s marketing since.
The company wished to be a volume player, and took over Britain’s Rover Group (the successor to Austin, which had given BMW its start in automotive manufacture) in 1993. The takeover proved ill-fated, and BMW sold Rover in 1999, keeping the Mini brand as well as competing trade marks such as Triumph. Rover went to a consortium, and Land Rover went to Ford. There was also an upmarket expansion as BMW bought the rights to the Rolls-Royce name for automotive manufacture in 1998, producing its first Phantom model in 2003.