Bayerische Motoren Werke AG (BMW)
Bayerische Motoren Werke AG, commonly known as BMW, is a prominent German multinational company in the automotive industry, headquartered in Munich, Germany. Founded in 1916, BMW has established itself as a leader in the luxury vehicle market and also produces the Rolls-Royce and Mini brands. Initially focused on aircraft engine production, the company made its foray into automobile manufacturing in 1928 and has since gained a reputation for high-quality engineering and luxury design. BMW is recognized for its innovation in both traditional combustion engines and electric vehicle technology, recently expanding its efforts into hydrogen fuel cell vehicles in collaboration with Toyota.
The company operates over thirty production facilities across fourteen countries, highlighting its global reach. BMW has a strong association with motorsports and prestigious sports events, enhancing its brand image as a symbol of performance and luxury. Environmental sustainability is also a priority, as BMW has received accolades for its research and development in electric vehicles and sustainable manufacturing practices. Despite facing challenges, such as the impact of the COVID-19 pandemic and geopolitical tensions affecting supply chains, BMW remains a leading manufacturer in the premium automotive sector, committed to reducing emissions and advancing green technologies.
Bayerische Motoren Werke AG (BMW)
- Date Founded: 1916
- Industry: Automotive
- Corporate Headquarters: Munich, Germany
- Type: Public
Bayerische Motoren Werke AG, better known as BMW, is a publicly traded multinational automotive company headquartered in Munich, Germany. The BMW brand is recognized as a leader in the luxury automotive market. In addition to the classic BMW line, the company also produces electric vehicles, the luxury Rolls-Royce brand, and the smaller Mini Cooper cars. In addition to cars, the company also manufactures motorcycles and scooters under the brand BMW Motorrad.
Founded in 1916 as Bayerische Flugzeugwerke AG (BFW), BMW is one of the oldest German automakers. The company has its roots in two early aircraft engine manufacturing companies and only entered the automotive market with the 1928 acquisition of an automaker. Renowned for both highly engineered consumer vehicles and luxury design aesthetics, BMW also has a high profile in the automotive racing world due to its track and touring race history and its motorcycle engineering and racing success. BMW has traditionally been the top-selling manufacturer of luxury vehicles in the world and one of the most recognized corporate brands. The company has been associated with elite sports events through its sponsorship of high-profile golf, tennis, sailing, and Olympic athletes. BMW operates more than thirty production facilities in fourteen countries on four continents. Its familiar blue and white emblem dates back to the company’s inception and has undergone only minor changes over the decades.
History
In 1913, German engineer Karl Friedrich Rapp founded Rapp Motorenwerke, an airplane engine manufacturing company. The company struggled, and after Rapp’s ouster, it was restructured as the Bayerische Motoren Werke GmbH, which gave rise to the very first use of BMW as a corporate logo. Soon, BMW merged with a second aircraft engine maker, Bayerische Flugzeugwerke AG (BFW), founded by Gustav Otto in 1916. Assisted by large government contracts to supply military aircraft engines to the Prussian army, BMW became an innovator in engine design.
Following Germany’s defeat in World War I, BMW faced an uncertain future. The absolute ban on German aircraft engine production imposed by the Treaty of Versailles left BMW floundering for a means to stay in existence. With the intervention of Camillo Castiglioni, one of the wealthiest men in central Europe, BMW took its first steps into the consumer vehicle market. In 1922, BMW moved its production hub to Munich, where it still resides. Within a year, it released its first motorcycle, the BMW R32, which was innovative for the time. Castiglioni is also credited with facilitating BMW’s 1928 acquisition of the bicycle manufacturer turned automotive company Fahrzeugfabrik Eisenach (FFE), which set the stage for BMW’s transition from motorcycles to automobiles.
When the treaty restrictions began to be lifted, BMW was poised to begin production of civilian automobiles. The first cars, built under a licensing agreement with the British Austin Motor Company, focused largely on manufacturing the Austin 7 car, which BMW called the Dixi. By 1932, BMW was producing its first cars utilizing its own design and engineering. Throughout the 1930s, BMW continued designing and building award- and race-winning cars and motorcycles. The 328 Roadster, introduced in 1936, became an automotive icon of that decade and was nominated in 1999 as the car of the century.
Civilian automobile production was halted when rearmament began prior to World War II, and BMW returned to engineering and manufacturing powerful, high-altitude aircraft engines for military use. Motorcycle production also continued due to the demand for this type of vehicle by the German army.
After the war, BMW returned to civilian production, relying heavily on motorcycle sales and introducing a car for the masses, the tiny bubble car, Isetta, in 1955. The success of the tiny car, of which over 160,000 were sold, and the investment by German industrialist Herbert Quandt, provided BMW with the financial wherewithal to launch its postwar reinvention in earnest. Having narrowly survived a takeover bid by its rival Daimler-Benz in 1959, BMW focused its efforts during the next decade on bridging the gap between its prewar luxury vehicles and the postwar Isetta by developing the 1500 model. Known as the New Series, the 1500 was highly successful and set the pattern for the postwar BMW brand, becoming the basis for all the cars produced through the 1960s.
The 1970s was a decade of rapid expansion for BMW. In 1971, the company established BMW Kredit, its financial services arm. In the next year, the company broke ground on its first manufacturing facility outside of Germany, locating it in Pretoria, South Africa. Also in the 1970s, BMW began developing an electric automotive design. In 1972, the company showcased its 1602 Electric at the Munich Olympic Games. That same year, BMW opened its first sales subsidiary in France, beginning the establishment of BMW as a leading international marketer of its luxury and high-performance automotive brand.
The 1990s brought the acquisition of the celebrated design studio Designworks, which was based in southern California, as well as BMW’s first US production facility, built in Spartanburg, South Carolina. In 1994, BMW bought the UK-based Rover Group, which built the Land Rover, MG, and Mini lines. In 2000, the Rover Group was sold to Ford Motors, with BMW retaining the Mini brand. Rolls-Royce Motor Cars was acquired in 1998, and in early 2003, BMW opened a new production plant for Rolls-Royces in Goodwood, England. Later that year, BMW opened its first manufacturing facility in China. In 2005, the company commenced production at its architecturally ambitious and award-winning Leipzig plant in Germany.
The global COVID-19 pandemic that began in 2020 led to a decline in global auto sales due to supply chain issues and lower demand that resulted from lockdown measures taken to curtail the spread of the virus. BMW, who reported over an 8 percent loss of sales in 2020, still remained the number one manufacturer of premium vehicles despite the numerous complications the pandemic provided. Despite the 2020 sales loss, by 2022, their demand increased significantly, their reported CO2 emissions were lower than 2019 estimates, and their revenues were the highest they had recorded.
In March 2022, BMW, along with several other European car manufacturers, reported that the ongoing Russian invasion of Ukraine was negatively affecting their production capabilities after the conflict disrupted the supply of vital vehicle computer components being manufactured in Ukraine. BMW, which had to scale back its production of vehicles in response, announced that it would close its vehicle production plants in Russia and stop exporting vehicles to the country. The invasion also negatively impacted Germany's supply of gas and oil, as the country was historically reliant on Russian oil and received its supply from pipelines that traveled through Ukraine.
In August 2022, BMW announced its plans to develop hydrogen fuel cell vehicles (FCEVs) with its long-time green vehicle partner, Toyota. The companies aimed to lower costs by combining powertrain units to create a third-generation fuel cell system with standardized components that could be used in many types of automobiles. FCEVs have long driving ranges, no carbon dioxide emissions, and short refueling times as low as three minutes. This collaboration allowed BMW to diversify its investments in green vehicle technology outside electric vehicles and noted that these vehicles would be less prone to the supply shortages experienced in the electric vehicle realm.
BMW’s vehicle, motorcycle, and scooter sales were positive in the mid-2020s, with record sales in several sectors. In 2022, BMW sold 202,895 motorcycles and scooters globally, a company record, and 2.4 million automobiles. In 2023, motorcycle and scooter sales rose over 3 percent to 209,257 after introducing the BMW M 1000 R and the BMW R 1300 GS, setting a new company record. BMW also set several other all-time records in 2023, including its highest-ever global vehicle sales at 2,253,835 and the BMW M division’s highest unit sales at 200,000. The company also sold 330,956 battery-powered cars and SUVs, a 92 percent increase from the previous year, and 222,600 electric vehicles, a 73 percent increase.
Impact
Over the years, BMW has received numerous awards recognizing its environmental work through its research and development of plug-in electric vehicles and hydrogen fuel cells; it has also been lauded for its efforts in designing and utilizing sustainable manufacturing practices.
Revelations linking BMW to the use of forced labor during World War II led the company to issue public apologies to survivors and their families. Beginning in 1999, BMW, along with other German companies, contributed to a fund to compensate survivors.
The highly recognized logo of a blue-and-white circle in alternating quarters was long thought to be representative of an airplane propeller against a blue sky, although BMW instead asserts that the colors are illustrative of the colors of the flag of Bavaria. The company slogan, "the ultimate driving machine," has been in almost continuous use since its introduction in the 1970s, and it has helped cement the reputation of BMW as the standard-bearer for exacting German engineering.
BMW has closely associated its brand with high-profile sporting events, especially golf, by sponsoring tournaments around the world both on the professional and amateur levels. BMW, which had often provided engines for several teams in Formula One beginning in the mid-twentieth century, briefly operated its own team, BMW Sauber, from 2006 to 2009.
In the early 2020s, BMW set out to lead the industry in green energy—both production and technology. In 2023, Dr. Thomas Becker, BMW’s Vice President of Sustainability and Mobility Strategy, told Forbes that the company was on track to reach its 2030 emissions goal. Using the so-called Scope One and Two method, BMW planned to cut its production emissions by 80 percent and reduce supply chain emissions by 20 percent. To meet these goals, BMW began sourcing materials locally when possible and using rail transport when possible to ship materials from suppliers. The company also switched to resource-efficient packaging materials.
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