BMW
Ahhh, the mother company.
History
Origins
Like so many of the world's car companies, BMW didn't start out making cars. Their story begins properly in 1913, when two Germans came together in Munich to form an aircraft engine company that would supply the German air force. The technical brains behind this company was Karl Rapp, whose name formed the basis of Rapp Motorenwerke GmbH.
One would expect the outbreak of WWI to be kind to the company, and it was, thanks to regular orders from the Austro-Hungarian empire. But as the war effort escalated, Rapp's wobbly, rattly engines failed to keep pace with the march of technology, and it was only thanks to the innovative designs of a young engineer called Max Friz that the company was able to continue. Friz developed the Rapp engines into a record-breaking engine called the IIIa.
The success of the IIIa was the downfall of Rapp. When the powers behind the company realised that the technical potential lay in the hands of young Friz, they terminated Rapp's contract, effectively ousting him from the company he had created. To disassociate themselves from his name, the company was renamed to Bayerische Motorenwerke GmbH, the first iteration of BMW. The famous roundel badge, portraying the initial letters above the blue-and-white of the Bavarian flag, comes from this time.
Unfortunately for the new form, things didn't go too well. As you may know, the Axis powers didn't win WWI, and in the following resolution the Treaty of Versailles placed huge restrictions on Germany's production capabilities, shutting down BMW's production at a stroke, and they were left producing a trickle of bespoke industrial machines.
At this point some clever finances stepped in. Another ex-aircraft company, Bayerische Flugzeugwerke (BFw) was finding its post-war business increasingly difficult. It had diversified into two industries; fitted kitchens and motorbikes, but was struggling to turn a profit with either. With its machinery becoming increasingly antiquated, it was acquired by the richest man in Central Europe, one Camillo Castiglioni. A keen aviator and canny investor, he also bought the rights to the BMW name and the machinery and patents with it, and thus set about incorporating that into BFw by transferring the equipment of the former to the factory of the latter, renaming the company BMW AG. He remained as president of the firm until 1929.
It was under Castiglioni that the real masterdeal was struck. As a competent manufacturer of aircraft engines and motorbikes, it seemed only natural for BMW to move into automobiles. With that in mind, BMW purchased Fahrzeugfabrik Eisenach A.G in the neighbouring state of Thuringia. This company, known as AWE, was producing a licensed copy of the Austin Seven, known as the Dixi.
First Cars
The Dixi was BMW's first automobile. Having acquired both the rights and the tools, BMW first set about increasing production, then improving the performance of the model. Renaming the car the BMW 3/15, it went through a number of technical iterations which, leaving the engine untouched, affected everything from the gearing to the brakes. Even a sports roadster was produced; 150 hand-crafted units with a high-compression 18hp motor called the 3/15 DA-3 Wartburg. Remember that name, we'll need it later.
The trouble with the 3/15 was the licensing. Despite the changes BMW made, the car was still heavily based on the Austin Seven, and BMW had to pay royalties to the British manufacturer for every model sold. To that end, they set about building their own car by attaching the technologies they'd developed to a newly-designed chassis. Power would still come from an Austin-derived engine, but BMW's aviation expertise boosted power from the feeble 15hp to a more practical 20hp, which earned the car its moniker 3/20.
