In the summer of 1916, as the First World War ground through its third catastrophic year, a small aircraft engine concern took shape in the industrial districts of Munich. It bore neither the roundel we recognise today nor the ambition of building automobiles. What it possessed instead was something more enduring: an obsession with the internal combustion engine, and with extracting from it the maximum output at the thin, cold altitudes where fighter aircraft dueled. That obsession — power delivered with precision, engineering as an end in itself — is the true founding document of BMW. Everything that followed, from the 328 roadster to the S58 straight-six, is written in that original grammar.
The company's earliest history is genuinely tangled — a story of mergers, renamings and financial rescues that reads less like a corporate biography and more like a wartime survival tale. Bayerische Motoren Werke, the name that would eventually adorn some of the most desirable machines ever built, was formally registered in 1917, but its roots reach into 1916 and the founding of the enterprises that combined to create it. To understand why BMW builds cars the way it does — inline-six engines, a fanatical devotion to power-to-weight, a badge shaped like a spinning propeller — you have to begin here, in the aircraft hangars of Bavaria.
This is the origin point of every chapter in the Heritage Vault. The roundel, the engineering ethos, the very corporate name were all cast in these years. Let us return to Munich, 1916.
The Historical Context: Munich in the Great War
By 1916 the aircraft had transformed from a fragile novelty into an instrument of war. The demand for reliable, high-altitude aero engines was insatiable, and the German war economy poured resources into any workshop capable of producing them. It was in this environment that the enterprises which would become BMW were born.
The story properly begins with two threads. The first was Rapp Motorenwerke, an aircraft engine manufacturer founded by Karl Rapp in Munich in 1913. Rapp's engines suffered from vibration and reliability problems, and the firm struggled financially despite wartime orders. The second thread ran through Gustav Otto — son of Nikolaus Otto, inventor of the four-stroke cycle — whose aircraft company, Gustav Otto Flugmaschinenfabrik, was reorganised in 1916 into Bayerische Flugzeugwerke AG (BFW). The commonly cited founding date of BMW, 7 March 1916, refers to the establishment of BFW.
The name Bayerische Motoren Werke itself arrived in 1917, when Rapp Motorenwerke was reorganised and renamed under the leadership of financier Camillo Castiglioni and the Austrian engineer Franz Josef Popp, with the brilliant designer Max Friz brought in to lead engine development. The threads of BFW and BMW would weave together over the following years, and the corporate lineage is why BMW today celebrates 1916 as its founding year even though the name Bayerische Motoren Werke dates to 1917. It is a founding myth built on a real, if untidy, corporate reality.
The Machine: The BMW IIIa Aero Engine
If any single object can be called BMW's founding masterpiece, it is the BMW IIIa aircraft engine, designed by Max Friz and entering production in 1917–1918. This was not merely another wartime engine; it was a demonstration of engineering intelligence that established the company's reputation almost overnight and set the template for BMW's future — a water-cooled inline-six.
The genius of the IIIa lay in its high-altitude carburettor. Conventional engines of the era lost power dramatically as they climbed, because the thinning air starved the mixture. Friz designed a carburettor that could be adjusted for altitude, allowing the IIIa to maintain output far higher than its rivals. At altitude, where combat was increasingly decided, this advantage was decisive. Fighter aircraft equipped with the IIIa — and its more powerful successor, the BMW IV — could climb higher and fight more effectively than opponents whose engines gasped in the thin air.
IIIa Technical Overview
| Specification | BMW IIIa |
|---|---|
| Configuration | Water-cooled inline-six, SOHC |
| Displacement | ~19 litres |
| Rated output | ~185 hp (higher at altitude vs. rivals) |
| Key innovation | High-altitude carburettor |
| Designer | Max Friz |
| Service entry | 1917–1918 |
The inline-six layout of the IIIa is no historical footnote. The straight-six would become BMW's signature engine architecture for a century — the smooth, revvy configuration that underpins everything from the Neue Klasse's 2000-series engines to the M50 that later introduced VANOS variable valve timing, right up to today's S58 twin-turbo. The DNA of BMW's finest engines can be traced, at least conceptually, to Friz's wartime six. You can explore this engineering lineage in our chassis and engine encyclopedia.
In 1919 a modified engine of this family pushed a biplane, flown by test pilot Franz Zeno Diemer, to an altitude of nearly 9,760 metres — an unofficial world record. It was a triumphant statement of what BMW engineering could achieve, delivered just as the company faced the abyss.
The Roundel: A Badge Rooted in Bavaria
Few automotive emblems are as recognised — or as misunderstood — as the BMW roundel. The blue-and-white quartered circle first appeared in 1917, evolving from the emblem of Rapp Motorenwerke, which used a circular black frame. The new BMW badge retained the ring but filled its centre with blue and white segments.
The enduring popular myth holds that the roundel represents a spinning aircraft propeller against a blue sky — a nod to the company's aero-engine origins. It is a beautiful story, and BMW itself leaned into it in period advertising, notably a 1929 image showing the roundel on a rotating propeller. But the historical truth is more prosaic and arguably more meaningful: the blue and white are the colours of the Free State of Bavaria, drawn from the Bavarian state flag's white-and-blue lozenges. Trademark law of the era prohibited using state coats of arms in a commercial logo, so the colours were reversed in order — blue and white rather than the flag's white and blue.
So the roundel is, above all, a declaration of place. It says: this company is Bavarian, made in Munich, an expression of a specific engineering culture. That the propeller legend attached itself so firmly only enriches the emblem — it now carries both the truth of Bavaria and the romance of flight. Every modern owner can find that same badge encoded in their car's identity; run your car through our VIN decoder to trace its Munich lineage.
From Aero Engines to Everything: The Survival Years
The Armistice of November 1918 nearly killed BMW before it had truly begun. The Treaty of Versailles banned Germany from manufacturing aircraft engines, obliterating the company's entire reason for existing. A firm defined by aero engines was suddenly forbidden from building them. This existential crisis forced the diversification that would ultimately make BMW an automobile manufacturer.
Motorcycles: The R 32
In the lean post-war years BMW built railway brakes, industrial engines and even household items to survive. But the pivotal pivot came in 1923 with the R 32 motorcycle. Designed by Max Friz — the same engineer behind the IIIa — the R 32 introduced a boxer twin engine mounted transversely with shaft drive, a layout so fundamentally sound that BMW motorcycles still use it a century later. The R 32 proved BMW could translate its engine expertise into complete vehicles.
Automobiles: The Dixi and Beyond
BMW entered car production in 1928 by acquiring the Fahrzeugfabrik Eisenach, which built the Dixi — a licensed version of the British Austin 7. It was a humble start, but it put BMW in the automobile business. Within a decade the company would astonish the world with a car that redefined what the marque could be: the sublime 328 roadster of 1936, whose lightweight construction and hemispherical-head engine turned BMW into a genuine performance brand and won its class at the Mille Miglia. The line from the IIIa's engineering ambition to the 328's competition success is direct and deliberate.
The Legacy: How 1916 Echoes in Every BMW Today
It is tempting to treat a company's founding as a mere historical formality — a date on a plaque. But BMW's origins shaped its character in ways that remain visible in showrooms more than a century later.
First, the engine-first philosophy. BMW has always been, at its core, an engine company that happens to wrap cars around its powerplants. From the 2002's spirited four-cylinder to the exotic straight-six of the M1 supercar, and the Formula 1–derived V10 of the E60 M5, the marque has repeatedly staked its reputation on engineering the finest engine in its class. The inline-six that debuted on the IIIa remains the emotional heart of the brand.
Second, the pursuit of power at the limit. The IIIa's high-altitude advantage was, in essence, a solution to the problem of extracting performance where conditions were hostile. That same relentless engineering — squeezing more from combustion — runs through the homologation-bred E30 M3 and the twin-turbo S58 of the G80 generation.
Third, the willingness to reinvent. BMW survived the ban on aircraft engines by transforming itself entirely — first into a motorcycle builder, then a carmaker. That capacity for reinvention has recurred throughout its history: the Neue Klasse of 1962 that saved a near-bankrupt company, the electric leap of the i3 and i8, and now the Neue Klasse revolution of 2026. As BMW navigates the electric era — a shift explored in our feature on how the Neue Klasse redefines BMW design — it is drawing on the same instinct that carried it out of the Versailles crisis a century ago.
The roundel that spins on the bonnet of a new electric iX carries exactly the same blue and white it bore in 1917. The engineering culture of Munich — precise, ambitious, occasionally stubborn — is the through-line connecting a wartime aero engine to a modern EV. That is why any serious history of BMW must begin here. For enthusiasts wanting to decode the specifics of any model in that lineage, our option code vault and BMW DNA encyclopedia map the technical genealogy in full.
Why 1916 Matters
BMW was not founded to build cars. It was founded to build the finest engines in the sky, at a moment when Germany's entire industrial capacity bent toward war. From that unlikely and troubled beginning came a company defined by engineering conviction — a conviction expressed first in the IIIa's altitude-conquering six, then in a badge painted in the colours of Bavaria, and finally in a century of automobiles that put the engine, and the driver, first.
Every subsequent chapter in this Heritage Vault — the 328, the Neue Klasse, the M Division, the electric age — is a variation on the theme first stated in Munich in 1916. This is where the Ultimate Driving Machine learned to fly.