To find the origins of BMW as a company, we have to go to 1913. That was when Karl Friedrich Rapp, a distinguished engineer who had been director of an early German aircraft company, set up business to manufacture aero engines. He established his company, the Rapp Motoren Werke, in the Milbertshofen suburb of Munich, capital city of Bavaria. His choice was made primarily because one of his major customers – the Gustav Otto aircraft company – was situated nearby.
Rapp’s ero engines were a success, but he continued to look for more work to keep his company busy. In 1916, he secured a contract to build a large number of V12 aero engines on behalf of Austro-Daimler, which was finding that it could not build enough to meet escalating demand. Rapp sought a backer to finance his company’s expansion and in March 1916 the Rapp Motoren Werke was renamed the Bayerische Motoren Werke. BMW – The Bavarian Engine Company – had been formed.
Unfortunately, Rapp had made the mistake of expanding too quickly. Within a year, there were problems. Rapp left the company and in his place came industrial tycoon Franz Josef Popp. It was Popp who laid the foundations of the BMW we know today.