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Small history on BMW

BMW AG originated with three other manufacturing companies, Rapp Motorenwerke and Bayerische Flugzeugwerke (BFw) in Bavaria, and Fahrzeugfabrik Eisenach in Thuringia. Aircraft engine manufacturer Rapp Motorenwerke became Bayerische Motorenwerke in 1916. The engine manufacturer, which built proprietary industrial engines after World War I, was then bought by the owner of BFw who then merged BFw into BMW and moved the engine works onto BFw's premises. BFw's motorcycle sideline was improved upon by BMW and became an integral part of their business.

 BMW became an automobile manufacturer in 1929 when it purchased Fahrzeugfabrik Eisenach, which, at the time, built Austin Sevens under licence under the Dixi marque. BMW's team of engineers progressively developed their cars from small Seven-based cars into six-cylinder luxury cars and, in 1936, began production of the BMW 328 sports car. Aircraft engines, motorcycles, and automobiles would be BMW's main products until World War II. During the war, against the wishes of its director Franz Josef Popp, BMW concentrated on aircraft engine production, with motorcycles as a side line and automobile manufacture stopped altogether.

After the war, BMW survived by making pots, pans, and bicycles until 1948, when it restarted motorcycle production. Meanwhile, BMW's factory in Eisenach fell in the Soviet occupation zone and the Soviets restarted production of pre-war BMW motorcycles and automobiles there. This continued until 1955, after which they concentrated on cars based on pre-war DKW designs. BMW began building cars in Bavaria in 1952 with the BMW 501 luxury saloon. Sales of their luxury saloons were too small to be profitable, so BMW supplemented this with building Isettas under licence. Slow sales of luxury cars and small profit margins from microcars caused the BMW board to consider selling the operation to Daimler-Benz. However, Herbert Quandt was convinced to purchase a controlling interest in BMW and to invest in its future.

Quandt's investment, along with profits from the BMW 700, brought about the BMW New Class and BMW New Six. These new products, along with the absorption of Hans Glas GmbH, gave BMW a sure footing on which to expand. BMW grew in strength, eventually acquiring the Rover Group (most of which was later divested), and the license to build automobiles under the Rolls-Royce marque.

Contents [hide] 

• 1 History of Bayerische Flugzeugwerke (BFw)
• 1.1 Gustav Otto Flugmaschinenfabrik
• 1.2 Bayerische Flugzeugwerke (BFw)
• 1.3 A later, unrelated BFw

• 2 Origin and history of BMW to the end of World War I
• 2.1 Rapp Motorenwerke
  
• 2.2 Bayerische Motoren Werke GmbH 1917
  
• 2.3 BMW logo
  
• 2.4 BMW AG
  

• 3 First crisis for BMW AG – WWI aftermath
• 3.1 Winter 1918 factory closure
• 3.2 Factory reopened
• 3.3 Company sold to Knorr-Bremse
• 3.4 Return of Castiglioni and merger with BFw

• 4 R32 motorcycle

• 5 Automobiles
• 5.1 Austin-licensed BMW Dixi
• 5.2 BMW designs its own cars
• 5.3 Six-cylinder cars

• 6 World War II

• 7 Second crisis for BMW AG – WWII aftermath
• 7.1 Three approaches to car manufacture

• 8 Third crisis for BMW AG – a company for sale
• 9 Expansion- Hans Glas GmbH
• 10 Rover
• 11 Redesign controversy
• 12 Production outside Germany
• 13 Rolls-Royce
• 14 See also
• 15 References
• 16 Further reading
• 17 External links

History of Bayerische Flugzeugwerke (BFw)

Gustav Otto Flugmaschinenfabrik

an Otto B-type pusher biplane, license-built by Pfalz, in front of the Pfalz factory, circa 1914

Gustav Otto, the son of inventor and industrialist Nikolaus August Otto, was a pioneer aviator in Bavaria. In 1910, Otto received German aviation license no. 34, proving his competence in an Aviatik-Farman. In the same year, Otto set up a training school and an aircraft factory, The factory, which was named Gustav Otto Flugmaschinenfabrikin 1913, was located on Lerchenauer Strasse, east of the Oberwiesenfeld troop maneuver area in the Milbertshofen district of Munich. Otto concentrated on buildingFarman inspired pushers and became the main supplier for the Bayerische Fliegertruppen (Royal Bavarian Flying Corps). Gustav Otto Flugmaschinenfabrik, renamed Otto Werke in January 1915, did not get orders from the Prussian military due to unexplained quality issues. The military urged Otto to revise his production line, but the issues were not resolved. Suffering financially, the Otto company was purchased by a consortium, which included MAN AG as well as some banks, in February 1916.

Gustav Otto had other companies grouped under AGO Werke, which from 1914 developed different aircraft from Otto-Werke. AGO had similar problems as Otto Werke and closed in 1918. AGO's facilities were taken over by AEG.

The end of the war hit BFw hard, since military demand for aircraft collapsed. The company’s management was forced to find new products in order to survive. Because aircraft were largely built from wood at that time, BFw was equipped with the very latest joinery plant and held enough stock of materials to build about 200 aircraft, which was worth 4.7 million reichsmarks. The company used the machinery and the materials in the production of furniture and fitted kitchens. In addition, from 1921 onwards, The company also built a motorized bicycle called the Flink and a motorcycle called the Helios. The Helios used a BMW M2B15 engine.

Main article: Messerschmitt

The name Bayerische Flugzeugwerke AG was revived in 1926 when Udet-Flugzeugbau GmbH was changed into a joint-stock company. In the early stages, BMW AG held a stake in this company and was represented by Popp, who held a place on the Supervisory Board. In time this company was renamed to Messerschmitt, an important and leading aircraft company for the Third Reich.

Origin and history of BMW to the end of World War I

Rapp Motorenwerke

In 1913 Karl Rapp established Rapp Motorenwerke near the Oberwiesenfeld. Rapp had chosen the site because it was close to Gustav Otto Flugmaschinenfabrik, with whom he had contracts to supply his four-cylinder aircraft engines.

Rapp was sub-contracted by Austro-Daimler to manufacture their V12 aircraft engines. Austro-Daimler at the time was unable to meet its own demands to build V12 Aero engines. The officer supervising aero-engine building at Austro-Daimler on behalf of the Austrian government was Franz Josef Popp. When it was decided to produce Austro-Daimler engines at Rapp Motorenwerke, Popp was delegated to Munich from Vienna to supervise engine quality.

Popp did not restrict himself to the role of observer, becoming actively involved in the overall management of the company. On 7 March 1916, Rapp Motorenwerke became Bayerische Motoren Werke GmbH. Popp convinced Karl Rapp to accept the application of Max Friz, a young aircraft engine designer and engineer at Daimler. At first Rapp was going to turn down Friz’s request; however, Popp successfully intervened on Friz’s behalf, because he recognized that Rapp Motorenwerke lacked an able designer. Within a few weeks Friz designed a new aircraft engine which, with an innovative carburettor and a variety of other technical details, was superior to any other German aero-engine. Later, this engine would gain world renown under the designation “BMW IIIa”

Bayerische Motoren Werke GmbH 1917

The departure of Karl Rapp in 1917 enabled a fundamental restructuring of BMW GmbH, formerly Rapp Motorenwerke. While the development side was placed under Max Friz, Franz Josef Popp took over the post of Managing Director. Popp held this key position until his retirement in 1942, and was instrumental in shaping the future of BMW.

For the small BMW business, the large orders received from the Reichswehr for the BMW IIIa engine were overwhelming. Under Karl Rapp only a small number of engines had been produced and the manufacturing facilities were not in any way adequate to handle the mass production now required. Not only did BMW lack suitable machine tools but, to a very large degree, skilled manpower as well. However, the most serious drawback was in the small and aging workshops. Nevertheless, under the state-controlled war economy, officials in the relevant ministries were able to give BMW extensive practical support. So in a short time BMW got the skilled workers and machinery it needed. In addition, the Munich company received a high level of financial assistance, which enabled it to build a completely new factory from the ground up, in the immediate vicinity of the old workshops. Due to the share capital being too small, both the building of the new plant and the working capital needed for materials and wages had to be financed with external funds, i.e. bank loans or state assistance. The war ministries of Bavaria and Prussia (then both separate kingdoms within the Kaiser’s Empire) did not, however, wish to go on supporting BMW with loans and guarantees, and therefore urged the flotation of a public limited company.

For the small BMW business, the large orders received from the Reichswehr for the BMW IIIa engine were overwhelming. Under Karl Rapp only a small number of engines had been produced and the manufacturing facilities were not in any way adequate to handle the mass production now required. Not only did BMW lack suitable machine tools but, to a very large degree, skilled manpower as well. However, the most serious drawback was in the small and aging workshops. Nevertheless, under the state-controlled war economy, officials in the relevant ministries were able to give BMW extensive practical support. So in a short time BMW got the skilled workers and machinery it needed. In addition, the Munich company received a high level of financial assistance, which enabled it to build a completely new factory from the ground up, in the immediate vicinity of the old workshops. Due to the share capital being too small, both the building of the new plant and the working capital needed for materials and wages had to be financed with external funds, i.e. bank loans or state assistance. The war ministries of Bavaria and Prussia (then both separate kingdoms within the Kaiser’s Empire) did not, however, wish to go on supporting BMW with loans and guarantees, and therefore urged the flotation of a public limited company.

BMW AG

In 1917 Julius Auspitzer’s son-in-law, Max Wiedmann, held about 80 percent of the shares in Rapp Motorenwerke. He had obtained most of these shares from his father-in- law in 1914 and had thus become a figure of great influence in the business. Even after the name-change to Bayerische Motoren Werke GmbH, Wiedmann remained the principal shareholder in the company. Wiedmann’s capitulation in July 1918 opened the way for the founding of a public limited company. On 13 August 1918 BMW AG was entered as a new company in the Commercial Register and took over from BMW GmbH all its manufacturing assets, order book and workforce. The old BMW GmbH was renamed "Maschinenwerke Schleißheimerstrasse" and was wound up on 12 November 1918. The share capital of BMW AG amounting to 12 million reichsmarks was subscribed by three groups of investors. One third of the shares was taken up in equal parts by the Bayerische Bankand the Norddeutsche Bank. A further third of the shares (worth 4 million reichsmarks) was acquired by the Nuremberg industrialist, Fritz Neumeyer. This ensured that 50 percent of the capital (6 million reichsmarks) was in the hands of Bavarian businesses or banks. The Bavarian government placed the highest value on this strong local shareholding. The final one-third of the BMW shares were taken up by a Viennese financier, Camillo Castiglioni

Castiglioni

During the war, Castiglioni had been one of the principal players in the Austro-Hungarian aircraft industry, and for a long time had had links with Rapp Motorenwerke. So he had probably already been influential in negotiating the major order from Austro-Daimler Motoren to Rapp Motorenwerke in 1916 and would have received a large commission on this. However, Castiglioni’s interests were not restricted to Austria. As early as 1915, by merging a number of companies, he had founded Brandenburgische Flugzeugwerke in the Berlin area, which supplied aircraft to the German navy. It seemed only logical that he would want to extend his network of companies by adding a German aero-engine manufacturer.

First crisis for BMW AG – WWI aftermath

Winter 1918 factory closure

The end of the war in November 1918 had a huge impact on the entire German aircraft industry. Since 1914 the military had been placing lucrative orders with aircraft and aero-engine firms. But now, military demand collapsed completely. Civil aviation was still in its infancy, and no substitute business could be expected from that quarter. The end of the war hit BMW particularly hard, since the BMW IIIa aero-engine was the only product the company was building in 1918, and suddenly there was no more demand for aircraft engines.

In order to enable companies to resume civil production as rapidly as possible, a central demobilization office was set up as soon as the war was over, and branches opened right across Germany. The Commissioner for Demobilization with responsibility for Bavaria ordered the closure of BMW’s Munich plant with effect from 6 December 1918. The employees of the fledgling company faced locked factory gates and a future that was far from certain. The reason given by the civil servants for this factory closure was the general shortage of raw materials such as coal and metals. The small supplies of coal that were still on hand had to be made available for the freezing population, and such supplies of metals as remained were diverted to consumer industries. As a former armaments manufacturer, BMW was sent away empty-handed.

Factory reopened

BMW’s top management was not discouraged by the compulsory closure decreed by the government. When permission was given for the gates to re-open on 1 February 1919, Managing Director Franz Josef Popp got the design department working constantly in order to have new products ready to sell to the peacetime market. Engines were designed for boats, cars, trucks and motorcycles. From the outset, BMW tried to remain an engine manufacturer. At the same time it also supplied industrial customers with products from its aluminum foundry

In 1919 BMW was forced to give up building aircraft engines completely, which it had initially continued on a modest scale. The Allies had banned Germany from building aircraft and aircraft engines, and in addition had demanded that all aviation assets manufactured up to that date should be handed over or destroyed. While the new BMW engines for civilian use were technically advanced, they could not provide the company with long-term security in a highly competitive market. The top management therefore began looking for alternatives

On 18 June 1919, BMW obtained a license agreement for the production of brake assemblies with the Berlin-based company Knorr-Bremse AG. The contract was to run for ten years and was intended to provide BMW with employment and profits until 1930. At that time, Knorr-Bremse manufactured state-of-the-art pneumatic brakes for trains and had the benefit of large, long-term contracts, which it could not, however, handle at its own factory. For this reason the Berlin company was looking for a manufacturer to license – and found it in Munich. One advantage BMW had in negotiating the contract was the announcement by the Bavarian government that they would be prepared to fit Bavarian trains with Knorr brakes provided they were manufactured in Bavaria

Company sold to Knorr-Bremse

From the summer of 1919 onward, the manufacture of pneumatic brakes increasingly overshadowed engine production. The brake business occupied the majority of the BMW workforce, which was once again being expanded. This reorientation of the BMW product range had an effect on the ownership structure. As soon as the war ended, most of the BMW shareholders had lost interest in the company. Only the major shareholder Camillo Castiglioni still believed at first that BMW had a future, and took up all the company shares himself. However, Castiglioni was not an entrepreneur who took the long view; he was an astute financier in search of a quick return. The manufacture of railway brakes provided an opportunity to build up a solid business with sure profits, albeit small ones – too small for Castiglioni. In August 1920, when the chairman of Knorr-Bremse AG, Johannes Vielmetter, offered to buy all of Castiglioni's shares in BMW, the Viennese speculator accepted. BMW was now wholly owned by the Knorr-Bremse company of Berlin. The new proprietors made only minor alterations to the structure of BMW, since they wished neither to change the management nor to get involved in the production process.

Return of Castiglioni and merger with BFw

Under the leadership of Knorr-Bremse, BMW’s growth was considerable. Between the end of 1918 and 1921 the workforce grew from 800 to 1,800. In addition, the company set up its own training program with classes at the factory. In this way, in 1921 alone, BMW was able to offer solid technical training to some 200 young people. However, the price for this comfortable commercial situation was dependence on Knorr-Bremse and the abandonment of its core business of building aircraft engines.

In 1922, Castiglioni offered to buy BMW's engine-building division, aluminum foundry, name, and trademark from Knorr-Bremse. Castiglioni declared that he intended to set up an engine manufacturing plant of his own, and so he asked for the drawings, patents and machine tools needed for manufacturing the engines. He also wanted to take with him to his new company several key figures such as the chief designer, Max Friz, and the chief executive, Franz Josef Popp. The remainder of the company, including the premises, would remain under Knorr-Bremse's ownership and would be renamed. His offer of 75 million reichsmarks was accepted by Knorr-Bremse and, upon the contract being signed on 20 May 1922, the BMW engine-building business was once again in Castiglioni’s hands, while the remainder of the company became a subsidiary of Knorr-Bremse and was renamed Südbremse AG.

Castiglioni did not purchase BMW's premises in its transaction with Knorr-Bremse. Instead, he merged his Bayerische Flugzeugwerke (BFw) into BMW and established BMW's factory and headquarters at BFw's premises. BMW was moved into the same buildings of Gustav Otto's former Otto-Flugzeugwerke on Lerchenauer Strasse 76. BMW's headquarters have been at that address ever since

BMW, with some 200 workers housed in the former BFw's old wooden sheds, began production on a modest scale. Initially its output was BFw motorcycles, proprietary engines, and spare parts for aircraft engines. To begin with, business for the “new” BMW AG did not go particularly well. The market for proprietary engines was still as hotly contested in 1921 as it had been in 1919 when BMW had gone into brake manufacture to secure its long-term future

In 1923, while Germany suffered through a year of runaway inflation and numerous attempted coups, BMW made a successful new start: the company resumed production of aviation engines, selling them mainly to the Soviet Union, and it launched the first motorcycle of its own design, the R32

In 1924 BMW built its 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. The major innovation was the use of a driveshaft instead of a chain to drive the rear wheel. To this day the driveshaft and boxer engine are still used on BMW motorcycles.

Austin-licensed BMW Dixi

In 1928, BMW bought the Eisenach-based Dixi Automobil Werke AG from Gothaer Waggonfabrik. Dixi's sole product at the time of the purchase was the 3/15 PS, a licensed copy of the Austin 7, production of which had begun in 1927. The Dixi 3/15 became the BMW 3/15, BMW's first production car, upon the absorption of Dixi Werke into BMW

BMW designs its own cars

Towards the end of 1930, BMW attempted to introduce a new front axle with independent wheel suspension for both their models, the BMW 'Dixi' 3/15 DA4 and BMW 'Wartburg' DA3, but this resulted in accidents with the prototypes because of construction faults. However, as the license with Austin would end in 1932, BMW decided upon the development of a completely new model and called in the help of German engineer Josef Ganz. He was hired as a consultant engineer at BMW in July 1931. At first, Josef Ganz negotiated with BMW about possible manufacture of his innovative rear-enginedMaikäfer prototype at BMW. However, BMW decided for a different model, more along the lines of the previous Dixi model. Therefore, with the assistance of Ganz, work started on the development of the BMW AM1 (Automobilkonstruktion München 1), a small car with a front-mounted engine, rear-wheel drive, and independent wheel suspension with swing-axles.

Six-cylinder cars

n 1933, BMW introduced the 303. Larger and more conventional than the AM-series 3/20, the 303 used BMW's new M78 engine, making it the first BMW automobile to use a straight-six engine.The 303 was also the first BMW to use the "kidney grille" that would become a characteristic of BMW styling. The 303 formed the basis for the four-cylinder 309 and the larger-engined 315 and 319,while the 303 chassis supported the 315/1 and 319/1 roadsters and the restyled 329.

BMW 303

The 303 platform was supplemented and later supplanted by the 326, a larger car with a more rigid frame. Introduced in 1936, the 326 was BMW's first four-door sedan. A shortened version of the 326 frame was used in the 320, which replaced the 303-framed 329, in the 321, which replaced the 320, and in the 327 coupé

World War II

Franz Josef Popp argued against this policy, contending that, although financially lucrative, the change in focus would mean that the BMW AG would be heavily dependent on decisions made by the Nazi regime. In June 1940, he wrote to the Chairman of the Supervisory Board, Emil Georg von Stauss, explaining that the situation could “threaten the very existence of BMW AG if there were any setback to aero engine production”. This change in focus did in fact lead to a significant increase in external control from political and military agencies, weakening the position of the BMW management and eroding the position of Franz Josef Popp, whose leadership of BMW had been relatively autonomous and autocratic to that point. Statutes enacted on October 1, 1940 required all subsidiaries to transfer profit and loss responsibility to BMW AG. Expansion of the aero engine business required several injections of capital to Flugmotorenbau GmbH, with the total capitalization of BMW AG increasing in stages to RM 100 million by 1944. Further restructuring was carried out in 1944, with centralization of sales in BMW AG and the GmbHs acting only as property companies.

The emphasis on aero engines caused significant changes in BMW AG's business. Motorcycle production located at the Munich manufacturing facility abandoned production of non-military motorcycles by 1940, producing only the R12 and the R75, which were supplied to the Wehrmacht. At the beginning of 1942, motorcycle production was transferred to Eisenach so that the Munich plant could be dedicated to aero engine fabrication, and in 1942, BMW abandoned motorcycle production altogether. BMW also ceased production of automobiles in 1940, since cars were not being produced for the military. Only automobile repair facilities were retained, along with a development department.

BMW AG plants were confiscated by Allied troops at the end of the war, and production of aero and jet engines for the Luftwaffe was shut down.

Second crisis for BMW AG – WWII aftermath

BMW AG was heavily bombed towards the end of the war, reducing most of the company's production facilities to rubble. In fact, by the end of the war, the Munich plant was completely destroyed. Of its sites, those in eastern Germany (Eisenach-Dürrerhof, Wandlitz-Basdorf and Zühlsdorf) were seized by the Soviets.

In the west, the Bristol Aeroplane Company (BAC) inspected the factory, and returned to Britain with plans for the 327 model and the six-cylinder engine as official war reparations. Bristol then employed BMW engineer Fritz Fiedler to lead their engine development team. In 1947, the newly formed Bristol Cars released their 400 coupé, a lengthened version of the BMW 327. that featured BMW's double-kidney grille.

While Alfred Böning had returned to BMW and developed the R24 and Fritz Fiedler had gone to work for Bristol, Alex von Falkenhausen and Ernst Loof had each started companies that built sports cars and racing cars. Von Falkenhausen started Alex von Falkenhausen Motorenbau (AFM), while Loof, in partnership with Georg Meier and Lorenz Dietrich, started Veritas. AFM and Veritas both competed in Formula 2, but both companies had shut down operations by 1954, when both von Falkenhausen and Loof were back at BMW.

1948 Bristol 400 with double-kidney grille

By the end of the 1940s BMW had returned to motorcycle manufacture but still had not restarted automobile manufacture. Kurt Donath, technical director of BMW and general manager of the Milbertshofen factory, solicited manufacturers, including Ford and Simca, to produce their vehicles under licence. In particular, Donath was looking to produce old models under licence, so that he could buy tooling along with the licence

While Donath was trying to find a car to build under licence, chief engineer Alfred Böning developed a prototype for a small economy car powered by a motorcycle engine. Called the BMW 331, the prototype used a 600 cc motorcycle engine, a four-speed gearbox, and a live rear axle. The body was designed by Peter Schimanowski and resembled a BMW 327 in miniature.

In 1954, the 501 was given an improved, more powerful version of its six-cylinder engine and split into two models, the 501A at basically the same trim level and a price reduction of DM1,000, and a decontented 501B at a further price reduction of DM1,000 below the 501A's price. In addition, the 502, basically a 501 with an even higher trim level and a 2.6 L aluminium V8 enginedesigned by Bőning and Fiedler, was introduced to lead BMW's luxury sedan range. The expanded line for 1954 doubled the sales of BMW's luxury car

Influenced by the public response to the introduction of Mercedes-Benz's 300SL and 190SL show cars at the International Motor Sports Auto Show in New York in February 1954, the management of BMW approved Grewenig's proposal to build a sports car based on the 502. Preliminary design sketches were seen by U.S. importer Max Hoffman, who suggested to industrial designer Albrecht von Goertz that he should submit design proposals to BMW's management as an alternative. Based on these proposals, BMW contracted the design of the sports car and a four-seat grand tourer to von Goertz in November 1954. The 507 roadster was introduced at the at the Waldorf-Astoria Hotel in New York in the summer of 1955, while the 503 four-seater was introduced in September of that year at the Frankfurt Motor Show

BMW knew that it needed a four-seat family car to keep up with the rising wealth and expectations of the German people, but it could not access funding to develop a new car for this market. They therefore developed the 600, a four-seat car based on the Isetta. The 600 used the front suspension, the front seats, and the front-mounted door from the Isetta, but used a new, longer ladder frame with a longer, four-seat body, a rear-mounted 0.6 L flat-twin motorcycle engine, and a full-width rear track. The 600's rear suspension was BMW's first use of the semi-trailing arm system that would be used on their sedans and coupes until the 1990s. Released in 1957, the 600 could not compete against the larger, more powerful Volkswagen Beetle. Production ended in 1959 after fewer than 35,000 were built.

Third crisis for BMW AG – a company for sale

By 1959, BMW was in debt and losing money. The Isetta was selling well but with small profit margins. Their 501-based luxury sedans were not selling well enough to be profitable and were becoming increasingly outdated. Their 503 coupé and 507 roadster were too expensive to be profitable. Their 600, a four seater based on the Isetta, was selling poorly. The motorcycle market imploded in the mid-1950s with increased affluence turning Germans away from motorcycles and toward cars. BMW had sold their Allach plant to MAN in 1954. American Motors and the Rootes Group had both tried to acquire BMW.

At BMW's annual general meeting on 9 December 1959, Dr. Hans Feith, chairman of BMW's supervisory board, proposed a merger with Daimler-Benz. The dealers and small shareholders opposed this suggestion and rallied around a counter-proposal by Dr. Friedrich Mathern, which gained enough support to stop the merger. At that time, the Quandt Group, led by half-brothers Herbert and Harald Quandt, had recently increased their holdings in BMW and had become their largest shareholder. By the end of November 1960, the Quandts owned two-thirds of BMW's stock between them

At the Frankfurt Motor Show in 1961, BMW launched the 1500, a 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.

By 1966, the Munich plant had reached the limits of its production capacity. Although BMW had initially planned to build an entirely new factory, the company bought the crisis-ridden Hans Glas GmbH with its factories in Dingolfing and Landshut. Both plants were restructured, and in the following decades BMW's largest plant took shape in Dingolfing.                                   

BMW 5 series (E12)