Bavarian Aircraft Works was founded in 1916. The company was created through a merger of an aircraft maker and a manufacturer of aircraft engine, which initially produced airplane motors. Bavarian Aircraft Works merged with Rapp Motor Works in 1917, which then became Bavarian Motor Works (BMW). In 1922, BMW started producing small engines for motorcycles. One year later, BMW launched its first motorcycle. In 1928, BMW presented its first automobile. Not long after that, in the 1930s, BMW established its reputation as a maker of high-quality motor vehicles. Although BMW was successful, it encountered many financial hurdles. BMW became profitable in 1959, which was the same year that the Quandt family invested $1 million. In 1966, BMW's automobile market segment consisted of a combination of high-performance engineering and comfort of the European luxury sedan. In 1975, BMW introduced the successful 7-Series. Over 15 years later, in 1991, BMW began working on the engineering prototypes for the redesigned 7-Seris that was to be launched for the 1994 model year.
The traditional strategy of following Mercedes" lead in pricing and styling, was slightly changed to stress and become the leader in technology, while maintaining its classy, sporty style. BMW invested significantly in Research and Development. Not many other car manufacturers could compete with BMW's high-level of performance, handling, and safety. BMW was known for the finest in performance and reliability.
BMW's headquarters were in Munich, Germany. Over 70 percent of BMW's suppliers were also located in Germany. Many operations, such as assembly plants, regional distribution centers, dealers, and other divisions, were located in different countries, including, but not limited to: Africa, Austria, Japan, and the United States. Also, over 70 percent of BMW's sales came from Europe. A large portion of BMW's remaining sales came from the United States and Japan.