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The Beginning of Bayerische Motern Werke
Bayerische Motoren Werke (Bavarian Motor Works), better known as BMW, was formed in 1916 from three manufacturing companies: Rapp Motorenwerke, Bayerische Flugzeugwerke, and Fahrzeugfabrik Eisenach. The newly formed company built motorcycles, industrial engines used for farm work, and aircraft engines. This aeronautic heritage is still reflected in the company's logo, which is a stylized airplane propeller in the colors of the Bavarian flag. After World War I, the company, along with other German manufacturers, was banned by the Allies from making aircraft engines in 1919. Still, it wasn't until 1929 that BMW made its first foray into car manufacturing.
Early Models and WWII
The restriction on aeronautics would not turn out to be that big of a blow for the engine-building company, especially since the demand for aircraft engines had naturally depleted, following the war. BMW focused its efforts on the motorcycle, and released the R32 motorbike in 1923. It came with a twin-cylinder engine and used a driveshaft instead of a chain. The R32 went on to be widely successful in racing competitions, and the company decided to transfer that success over to the automobile. By the end of the decade, BMW began to manufacture a version of the British Austin Seven under the name Dixi in 1928. Eventually, the company began to improve upon these models until it began production of its own, shrinking in size considerably to offer an alternative to the prominent Mercedes-Benz Typ 8/38.
One of the first cars designed by BMW was the 303, six-cylinder luxury car. It had distinctive "kidney grilles" that are still prevalent in BMW styling. The 303 provided a foundation for larger-engined 315 (BMW's first sports car) and 319, which were replaced in 1936 by the 328, another sports model. The 328 had a specially designed engine with hemispherical aluminum cylinder heads. It was introduced to racing at Germany's famous Nurburgring where it won the 2.0-liter class. In 1937 it was best in class in more than 100 races. Decades later, in 1999, a group of automotive journalists chose the 328 as one of 25 finalists for the Car of the Century Award.
Unfortunately for BMW, its early success was about to be cut short as the Nazis rose to power in Germany. The company moved back towards building aircraft engines for the German military, with motorbikes acting as more or less a side business. Production of cars was halted completely. BMW General Director Franz Josef Popp argued against the move, pointing out that it would make BMW dependent on military decisions. To other leaders in the company, though, the opportunity seemed too lucrative. Popp was removed from the position of General Director in 1942. Popp was proved right in the long run. BMW's marriage to the German military had ultimately crippled the company. By the time the war came to a close, Many of BMW's factories had been bombed and the Allies had banned the company from engine production for three years. In those years, BMW manufactured bicycles and cooking pots and pans in its attempts to stay afloat. It didn't produce a motorcycle again until 1948 or a car until 1952.
The One-Cylinder Engine and an Economic Miracle
The first car BMW released after the War was the 501, a luxury car which Germans took to calling "the Baroque Angel," due to the flowing wing-like appearance of its body. It was soon followed by the 502, which bore BMW's first eight-cylinder engine made of an aluminum alloy. It had improved acceleration and could reach up to 100 mph. Perhaps inspired by its historical success with the 328, BMW next attempted a sports car, the 503. Around this same time, an American auto importer named Max Hoffman convinced BMW that a roadster based on the 501 would fill a gap in the market. This became the 507. The 503 and 507 were failures in their time, but came to be popular with collectors. Only 413 503s were built and only 252 507s. The 507s in particular represented a major financial loss for BMW. Elvis Presley did buy one while stationed in Germany with the US Army, though. When he got home, he swapped the engine out for a Ford V8 and gifted the car to actress Ursula Andress. Today, 507s are highly sought after by collectors due to their extreme rarity and their historical place as the precursor to the many successful BMW roadsters which came later. The 503 and 507 also sold poorly in large part because of Germany's weak post-war economy. There was not much market for performance cars in Germany at the time, and, without high demand, they were too expensive to produce to be profitable.
BMW tried a different tactic, and began manufacturing the Isetta microcar. The Isetta was a tiny single-cylinder, three-wheeled, bubble-shaped car first produced by Italian manufacturer Iso. Iso licensed the Isetta to manufacturers in several different countries. BMW kept much of the design of the Iso Isetta but reengineered it to the point that very few parts were interchangeable between the BMW and Iso versions. BMW sold more than 150,000 Isettas, making it the highest-selling single-cylinder car in the world. This lead to BMW attempting larger versions of the Isetta, including the four-seater 600. The 600 was available from 1957-1959, with about thirty thousand being built. It faced stiff competition from the Volkswagen Beetle and was swiftly discontinued.
By the late 1950s, Germany was undergoing its Wirtschaftswunder, or "economic miracle." Germany undertook new policies to foster economic growth, including the adoption of a new currency to replace the highly inflated Reichsmark. There was also an influx of money from the Marshall Plan and from American soldiers stationed in Germany. At times there were as many as a quarter million US soldiers stationed there who spent their money on food, beer, and, more importantly, cars. From 1950 to 1960, the purchasing power of wages increased 73%, making Germans able to buy luxury goods. Motorcycles and bubble cars were on their way out, and real cars were on their way back in. The time was finally right for BMW to introduce a new car: the 700.
The 700 wasn't a complete departure from those projects which kept BMW afloat through the 1950s, though. The chassis was a lengthened version of the 600 chassis and the engine was an enlargement of the one used in the 600 and one of BMW's motorcycles. The 700 was first displayed at the 1959 Frankfurt Motor show. 25,000 customers ordered 700s after the show. This was good news for BMW, which had been losing money and narrowly avoided merging with Daimler-Benz that same year. From 1960 to 1965 BMW sold nearly 190,000 700s. The 700 also returned BMW to motorsport, taking class wins at the 1960 Hockenheim 12 hour race and the six hour Nurburgring race the same year.
The New Class
Riding on the success of the 700, BMW introduced what it called the "New Class" in 1962. The "New Class" referred to BMW's move away from luxury cars like the 501 and economy cars like the Isetta to a new type of vehicle: compact sedans and coupes with engines from 1.5 up to 2-liters. This was a big increase over the 697cc engine of the 700. The 1500 introduced the monocoque body, MacPherson struts, and independent suspension, which became the hallmark of the New Class. The 1500 sold so well that in 1963 BMW was able to pay dividends to its stockholders for the first time since the War. The 1500 was followed by other models whose names indicated their approximate engine displacement in cubic centimeters: the 1800 in 1963, the 1600 in 1964, and the 2000 in 1966. At the time, Road and Track called the 2000 "the best performing 2-liter sedan in today's market and the best handling and best riding as well."
Following the success of the New Class sedans, BMW began to produce coupes in the line too. These were designated by a number 2 (for two doors) at the end of the model designation, as in 1966's 1602. In the late 1960s, Helmut Werner Bönsch, BMW's director of product planning and Alex von Falkenhausen, the designer of the M10 engine used in the New Class cars, realized that they both had fitted 2-liter engines into their 1600s. At the same time, Max Hoffman, the inspiration behind the 507, was asking BMW for a sporty coupe to sell in the US. Despite Hoffman's previous track-record, BMW took his advice and built the 2002. The 2002 won the Nurburgring 24 hours in 1970. In 1973, BMW introduced the 2002 Turbo, Europe's first production turbocharged car. Unfortunately, 1973 was the year of the Oil Crisis, and sporty models would prove less popular. Fewer than 1700 2002 Turbos were built. In 1975, the smaller-engined 1502 was introduced. Although the other 02 models were being replaced by the 3 series, the 1502 carried on for another two years.
The Numeric Naming System
Although the New Class was a big hit for BMW, it was the models that followed for which the company is best know today. Most of these models bear a three digit name, with the first representing the series line and the second two initially referring to the engine size (e.g. a 325 is a three series with a 2.5 liter engine). In later models, this number came to be a qualitative ranking of engine performance rather than a strict quantitative measure of engine size. There are also a number of letter codes that can be appended to the end of the model designation, the most notable being -i for direct injection and -x for vehicles with BMW's xDrive four wheel drive system.
Around this same time, BMW officially established its M-Technik or simply M division to assist its racing program. Over time, though, BMW began to introduce high performance M vehicles to the consumer market. Today, an M3, for example, is a performance version of the 3-series. The M stands for "motorsport," although some have joked that it stands for "marketing" or "more expensive." The first BMW to replace the New Class was the 5-Series, introduced in 1972 to replace the New Class sedans. Since then, the 5-Series has become one of BMW's most popular models. In 2010, it produced almost half of BMW's profits and was the company's second best-selling model after the 3-series. This came on the heels of years of widespread acclaim. The 5-Series made Car and Driver's Ten Best list every year from 1997 to 2002, and was named What Car? magazine's Executive Car of the Year in each of those years.
Just as the 5-series replaced the New Class sedans, the 3-series replaced the New Class coupes beginning in 1975. In 1981, the 3-series would become available in a four-door version, taking its place as BMW's compact executive car. The 3-series had a streak of appearances on Car and Driver's Top Ten list even more impressive than the 5-series'. It made the list every year from 1992 to 2012, which is the list's longest streak. It also had a streak of wins at the Nurburgring 24 hours. In 1994, 1996, and 1997, M3's won the race, while a 320i won in 1995, and a 320d (diesel) won in 1998. With those kinds of credentials it's no surprise that the 3-series is BMW's best selling model, making up nearly one-third of the brand's total automotive sales.
Where the 3-series provides a smaller, nimbler alternative to the 5-series, the 7-series is bigger and more luxurious. The 7-series, introduced in 1977, became BMW's flagship model, where it introduced new technologies and luxury options, which would sometimes trickle down to BMW's other models. For example, the 1986 model included options like traction control, an integrated telephone and fax machine, a wine cooler, and system which applied pressure to the windshield wipers at high speed to hold the wipers firm to the windshield. With that level of gadgetry, it's only fitting that a 750i was used about ten years later in the James Bond movie Tomorrow Never Dies. It was one of several BMWs used while Pierce Brosnan played the cinematic spy. The other BMWs Bond drove came from BMW's Z-series of two-seater roadsters. In Goldeneye, Bond drives a Z3, and in The World is Not Enough he briefly drives a Z8 before it is, sadly, destroyed by the villains.
Finally, Max Hoffman's dream had come true and BMW had popular and financial success with a roadster. Still, the project once again had a rocky start. The first Z-series roadster, the Z1, released in 1989, incited a lot of speculator demand but very little actual market demand. Although BMW claimed to have received orders for about 35,000 of them, only about 8,000 were ever actually produced in the course of two years. Today the Z1 is most famous for having doors that dropped into the door sill at the press of a button.
The Z1 was followed by the Z3 in 1996. Unlike the Z1, the Z3 saw actual high demand and the entire production run of 15,000 cars sold out by the time the car was introduced. Ironically, the company that once failed to sell its first roadster was now struggling to produce enough to meet demand. To honor the success of BMW's return to its roadster roots, it built a concept car, the Z07 based on the 507. The concept proved so popular that BMW made a limited run of around 6,000 production versions, sold as Z8s from 2000 to 2003. In 2002, BMW released a true production follow-up to the Z3, the Z4, which was slightly larger and more rigid. In 2009, the Z4 saw an update to a retractable hardtop.
BMW is one of the best selling luxury automakers in the world. It, Audi, and Mercedes-Benz make up the "German Big Three," of luxury car manufacturers. BMW has faced a long and not altogether easy road to reach that pinnacle, however. In more recent years, BMW has begun to expand its model line, introducing the 1-Series of compact family cars, the 4-series of compact executive coupes and the 6-series of grand tourers, as well as X-series SUVs and the i3 electric city car. The i3 has a small body and some have suggested that the "i" in the name is a tribute to the Isetta.
BMW has come a long way since it nearly ceased to be in World War II. Where once it was reduced to turning very small profits on very small cars, today, it is a brand world-renowned for its performance and luxury. In the days of the Isetta it may have seemed absurd to think that BMW would return to the racing success of the 328, but BMW has won numerous racing titles and is known for its performance oriented M vehicles. By riding the wave of Germany's economic miracle, and following a commitment to building high-end cars, BMW has managed to set itself apart as the builder of some of the world's most acclaimed cars.