ayerische Motoren Werke AG (BMW), German manufacturer of automobiles, motorcycles, and aircraft engines. Based in Munich, Germany, the company is the leading auto exporter in Europe. The English translation of the company's name is Bavarian Motor Works.

    The company traces its origins to 1913, when a Bavarian named Karl Rapp began an aircraft-engine shop in Munich named Rapp Motoren Werke. In 1917 Rapp resigned and the company, led by Austrian engineer Franz-Josef Popp, changed its name to Bayerische Motoren Werke. That same year chief engineer Max Friz designed the company's first aircraft engine, the six-cylinder Type IIIa, which created strong demand for BMW engines. When the 1919 Treaty of Versailles prohibited German companies from producing aircraft and aircraft engines, BMW switched to making air brakes for railway cars. In 1923 Friz developed the company's first motorcycle, the R32, a model that held world speed records for motorcycles during most of the 1930s.

    In 1928 the company entered the automobile business by acquiring Fahrzeugwerke Eisenach (Eisenach Vehicle Factory), a maker of small cars based in Eisenach, Germany. In the 1930s BMW began producing a line of larger touring cars and sports cars, introducing its highly successful model-the 328 sports car-in 1936.

    After World War II ended in 1945, Allied forces dismantled the company's main factories. BMW made kitchen and garden equipment before introducing a new, inexpensive motorcycle to the German market in 1948. The company's return to auto production in the 1950s resulted in poor sales. In the 1960s the company turned its fortunes around by focusing on sports sedans and compact touring cars, and it began to compete with Mercedes-Benz in the luxury-car markets of Europe and the United States. BMW's U.S. sales peaked in 1986 but then dropped steeply, partly due to competition from two new luxury cars-Lexus, made by Toyota Motor Corporation, and Infiniti, made by Nissan Motor Co., Ltd. The 1989 collapse of the Berlin Wall led to a boom in car sales in Europe, and in 1992 BMW outsold Mercedes-Benz in Europe for the first time.

In 1990 BMW formed a joint venture with the British aerospace company Rolls-Royce PLC to produce aircraft engines for business jets. In 1992 BMW broke ground for a major automobile plant in Spartanburg, South Carolina, its first automobile plant in the United States. In 1994 BMW acquired 80 percent of the Rover Group-a British manufacturer of small cars, luxury cars, and Land Rover sport-utility vehicles-from British Aerospace PLC. The $1.2 billion acquisition brought the company into new markets.