In 1916 the company secured a contract to build V12 engines for Austria-Hungary. Needing extra financing, Rapp gained the support of Camillo Castiglioni and Max Friz, the company was reconstituted as the Bayerische Motoren Werke GmbH. Over-expansion caused difficulties; Rapp left and the company was taken over by the Austrian industrialist Franz Josef Popp in 1917, and named BMW AG in 1918.

After World War I, the Treaty of Versailles (1919) prohibited the production of aircraft in Germany. Otto closed his factory and BMW switched to manufacturing railway brakes.

In 1919 BMW designed their first motorcycle engine to be used in a model called the Victoria which was built by a company in Nuremberg.

In 1923 BMW built their first model motorcycle, the R32. This had a 500 cc air-cooled horizontally-opposed engine, a feature that would resonate among their various models for decades to come, albeit with displacement increases and newer technology.

In 1927 the tiny Dixi, an Austin Seven produced under licence, began production in Eisenach. BMW bought the Dixi Company the following year, and this became the company's first car, the BMW 3/15. By 1933 BMW were producing cars that could be called truly theirs, offering steadily more advanced I6 sports and saloons (sedans). The pre-war cars culminated in the 327 saloon and 328 roadster, fast 2.0 L cars, both very advanced for their time.

World War II BMW motorcycles, specifically the BMW R 12 and the BMW R 75 combination were used extensively by the Reconnaissance formations of German panzer and motorised divisions of the Heer, Waffen SS and Luftwaffe.

BMW was also a major supplier of engines to the Luftwaffe and of engines and vehicles, especially motorcycles, to the Wehrmacht. Planes used the aero-engines included the 801, one of the most powerful available. Over 30,000 were manufactured up to 1945. BMW also researched jet engines, producing the BMW 003, and rocket-based weapons. BMW has admitted to using between 25,000 and 30,000 slave labourers during this period, consisting of both inmates of infamous concentration camps such as Dachau and prisoners of war.

The BMW works were heavily bombed towards the end of the war. Of its sites, those in eastern Germany (Eisenach-Dürrerhof, Wandlitz-Basdorf and Zühlsdorf) were seized by the Soviets. The factory in Munich was largely destroyed.

In the east, the company's factory at Eisenach was taken over by the soviet Awtowelo group which finally formed Eisenacher Motor-Werke. That company produced cars called "BMW" until in 1951 the Bavarian company prevented use of the trademarks — the BMW name, the logo and the "double-kidney" radiator grille — the cars being then rebranded EMW. Production continued until 1955.

In the west, representatives from the Bristol Aeroplane Company inspected the factory, and returned to Britain with plans for the 326, 327 and 328 models. These plans, which became official war reparations, along with BMW engineer Fritz Fiedler allowed the newly formed Bristol Cars to produce a new, high-quality sports saloon (sedan), the 400 by 1947, a car so similar to the BMW 327 that it even kept the famous BMW grille.

That same year, BMW launched the 700, a small car with an air-cooled, rear-mounted 697 cc boxer engine from the R67 motorcycle. Its bodywork was designed by Giovanni Michelotti and the 2+2 model had a sporty look. There was also a more powerful RS model for racing. Competition successes in the 700 began to secure BMW's reputation for sports sedans.

At the Frankfurt show in 1961, BMW launched the 1500, a powerful compact sedan, with front disc brakes and four-wheel independent suspension. 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.

The "New Class" 1500 was developed into 1600 and 1800 models. In 1966, the two-door version of the 1600 was launched, along with a convertible in 1967. These models were called the '02' series—the 2002 being the most famous—and began the bloodline that later developed into the BMW 3 Series.

In 1968, BMW launched its large "New Six" sedans, the 2500, 2800, and American Bavaria, and coupés, the 2.5 CS and 2800 CS.

By the 1970s, BMW was commercially successful and in December 1971, moved in to its present HQ in Munich, architecturally modelled after four cylinders.

In 1972, the 5 Series was launched to replace the New Class sedans, with a body styled by Marcello Gandini. The New Class coupes were replaced by the 3 Series in 1975, and the New Six became the 7 Series in 1977. Thus the three-tier sports sedan range was formed, and BMW essentially followed this formula into the 1990s. Other cars, like the 6 Series coupes that replaced the CS and the M1, were also added to the mix as the market demanded.

"The English Patient" Between 1994 and 2000, under the leadership of Bernd Pischetsrieder, BMW owned the Rover Group in an attempt to get into mass market production, buying 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. For years, Rover tried to rival BMW, if not in product, then in market positioning and "snob appeal". 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.

BMW was more successful with the Mini and Land Rover brands, which did not have parallels in its own range at the time.

In 2000, BMW disposed of Rover after years of losses, with Rover cars going to the Phoenix Venture Holdings for a nominal £10 and Land Rover going to the Ford Motor Company. In the press, many years of under-investment by Rover before BMW's ownership were mainly blamed for the debacle; productivity and industrial relations were generally good during this period. The German press ridiculed the English firm as "The English Patient", after a film at the time. BMW itself, protected by its product range's image, was largely spared the blame — even though it was the serious marketing issues that brought Rover down. Even the British press was not particularly sympathetic toward Rover.

BMW retained the rights to Mini, Rover, Triumph and other marques. MINI has been a highly successful business, though the other names have not been used.

The BMW logo is a circle (known as a roundel) divided into quadrants of alternating white and light blue colour. This is a stylized representation of an aircraft propeller. The colours of the logo are those of the flag of Bavaria.

Redesign Controversy In the early part of the 2000s, BMW undertook another of its periodic cycles of redoing the styling design of its various series of vehicles, under the auspices of newly promoted design chief Christopher Bangle. These designs, which were much curvier and 'swoopier' -- a design cue called "flame surfacing" by Bangle, did not rest well at all with BMW enthusiasts or the automotive press which referred to the new designs as "Bangled" or "Bangle-ized". While Bangle did not pen all of these designs, and has indeed been promoted within the company, some question what long term effect the disaffection of BMW traditionalists for these designs will have on sales, and on the company's future. Despite the controversy, BMW sales have increased year after year, showing the buying public's embrace of the new design philosophy.

What is not well known, however is that Bangle was indeed responsible for many 'conservative' BMW designs and has worked at BMW for almost a decade. The first X5 sketches (which highly resembled the production car), were designed by him, and under his tenure the E46 came to be.

Production outside Germany BMW started producing automobiles at its Spartanburg/Greenville, South Carolina plant in 1994. Today, the plant manufactures the BMW X5 and BMW Z4 Roadster.

The Spartanburg plant is open six days a week, producing automobiles approximately 110 hours a week. It employs about 4,700 people and manufactures over 500 vehicles daily.

After a period of local assembly, BMW's Rosslyn, South Africa plant now manufactures cars, with over 70 percent of its output destined for export. In the mid-1990s, BMW invested R1 billion to make Rosslyn a world-class facility. The plant now exports over 50,000 3 Series cars a year, mostly to the USA, Japan, Australia, Africa and the Middle East.

Starting from October 2003, BMWs are produced in Shenyang, China. BMW has established a joint venture with Chinese manufacturer Brilliance to build BMW 3 Series and 5 Series vehicles for the local market.

Rolls-Royce In the early 1990s, BMW and Rolls-Royce Motors began a joint venture that would see the new Rolls-Royce Silver Seraph and Bentley Arnage adopt BMW engines.

In 1998, both BMW and Volkswagen tried to purchase Rolls-Royce Motors. Volkswagen outbid BMW and bought the company for £430 million, but BMW outflanked its German rival. Although Volkswagen had bought rights to the "Spirit of Ecstasy" mascot and the shape of the radiator grille, it lacked rights to the Rolls-Royce name. Rolls-Royce plc (the aero-engine business) retained the rights over the Rolls-Royce trademark and wished to strengthen its existing business partnership with BMW which extended to the BMW Rolls-Royce joint venture. Consequently, BMW was allowed to acquire the rights to the grille and mascot, and licensed the name and "RR" logo after 2003 for £40 million. Volkswagen was permitted to build Rolls-Royces at its Crewe factory only until 2003, but quickly shifted its emphasis to the Bentley brand.