Acquiring an engine factory on the eve of the 1929 crash could lead you to fear the worst.
Fortunately, in the 20s, Eisenach had bought from Austin the licence for a small English car: the Seven in England, the Bantam in the USA, Datsun in Japan and Rosengart in France. Germany christens it Dixi. It will be the first BMW.
In 1927, the launch of the Dixi is perfect timing to save BMW’s independence.
But Emil Georg von Strauss, director of Deutsche Bank, dreams of merging BMW and Daimler-Benz. This is natural, since he is Daimler-Benz’s Chairman of the Board, BMW’s as well!
On April 15, 1926, a merger agreement is signed, defining the companies’ activities: BMW will build airplane and motorcycle engines, as well as a small-engine car. Daimler-Benz will make airplane engines, and Mercedes brand sedans. The wedding seems inevitable.
In 1929 Daimler-Benz dealerships showcase the Dixi and Mercedes side by side.
But the engagement goes on and on. At the end of six years, the parties get cold feet, and BMW launches its 6-cylinder 303 model. Daimler-Benz does not appreciate this breach in the contract.
In 1933, they both decide to regain their freedom. The divorce is announced before the wedding takes place!
The Reich über alles!
The 303 is launched in 1933, 11 days after the elections placing Hitler in power. BMW counts on the 303 to consolidate its technological advances, and to demonstrate its ambition.
This requires a distinctive mark. The “double kidney” logo appears for the first time in 1933; 70 years (and several evolutions) later, it still adorns each BMW’s bonnet. Produced in small batches, the 303 is elegant and prestigious, but its price rather steep. But it captures 5% of the German market in one year.
The company continues with its offensive. The 303 becomes the 309, then the 315 in various models: coupe, convertible, and roadster.
In 1937, the 328 is launched
On April 28, 1940, two men drive the 2-litre 328 Coupe Sport into the history books, by winning the most prestigious of road tests: the Mille Miglia. These men are baron Fritz Huschke von Hanstein (29 years old), nicknamed “the Racing Baron” and Walter Bäumer (32 years old). Their “Mille Miglia” Coupe 328 bearing number 70 follows all the racing stars, but in Brescia it stuns everyone by crossing the finishing line barely 9 hours later, having covered 1600 km with a remarkable average of 170 km/h! Although Hanstein (1911-1996 ) was able to rest on his laurels for a lengthy period, Bäumer died tragically at the wheel one year later, in his own driveway!
For BMW, these 1940 Mille Miglia races are a complete triumph, with 3 other 328 roadsters taking respectively 3rd, 5th and 6th places!
The 328 record list is impressive. It wins the German Grand Prix and the Coupe des Alpes in 1938, the Brookland Speed Trials in 1939 and the Australian Grand Prix in 1948!
For a long time, the Nazis exploit these brilliant victories for their propaganda. They expand BMW’s factories, but intend to use the engine and motorcycle engines for military purposes. BMW has no choice: Hitler must be obeyed…
The first jet airplanes
At the request of the Reich, the air-cooled Hornet engine is overhauled. Renamed BMW 132, it equips the extraordinary Junker JU 52, which, throughout its entire career, never experienced engine failure (and is still flying)! More than 30,000 units of its successor, the 801, are produced prior to 1945.
BMW does it again with the 003. This jet engine, tested on the Messerschmitt 262 in 1943, is subsequently used in the air reconnaissance Arado 234.
Obviously, during the war the Bavarian factories are the target of allied bombings… Even after the end of the conflict, BMW remains suspect. As a result, the Allies dismantle some 12,000 machines. The Allach factory in Munich, relatively unscathed, is used for repairing American vehicles. And this is only on the condition that BMW keeps it…
All the factories are not so lucky. The Eisenach plant, in the Soviet sector, is renamed Avtovelo by the Russians. Their vehicles are marked with the BMW logo, or rather: EMW, in red letters on a white background. Munich finally gets back the monopoly on its logo and, after 1951, Eisenach’s cars are called Wartburg.
In 1945, BMW’s factories are destroyed or empty and the production sites are distributed among the Western and Soviet occupied zones.
The motorcycle saves Munich after the war
After the First World War, the motorcycle had saved BMW. Why not a second time? In 1948, the Allies give the green light: production can start up again.
At Christmas 1948, the R 24 is released from its chains. This 250 cm3 is based on the “old ” pre-war R 23, but the 12,000 units produced are snapped up. In 1950, BMW builds 17,000 of them, in 1951, 25 000 units, and finally 30,000 units in 1952.
The market for BMW motorcycles is rebuilt. Now for the automobile…
BMW launches the 501, a big 6-cylinder sedan, poorly suited to this period of scarcity. So Munich launches the 502, which is more attractive (aluminium V8 and disc brakes). In the beginning, sales are brisk, reaching 3,736 in 1956. But they quickly decline to 1,700 the next year.
Disaster continues: sales of the 503 and the magnificent 507 (coupe and convertible), launched in 1956, reach only 413 and 252 units respectively, and create a large deficit.
Since it never rains but it pours, sales of motorcycles collapse at the same time (15,000 in 1956 and one-third of this figure in 1957, at 5,400). In the more prosperous post-war years, the motorcar as a “means of transport” starts to outrank the motorcycle.
It is a catastrophic situation. Time to call it quits?
In 1956, Munich decides to play its last card: the Isetta
This funny little thing, half-motorcycle, half-car, is powered by a BMW single-cylinder. In 1958 it develops into the 600 with a side door. 35,000 units of this funny BMW creation are produced until 1962, and allow Munich to recover.
But customers are still not satisfied: they want “a real car”.
The 700 is unveiled in 1959 to an indifferent response. This beautiful rear-engine sedan comes along just at the right moment, but it is too late: the public has lost faith in the company.
The general meeting is scheduled for December 9, 1959… Everyone knows the result.
By choosing independence, Herbert Quandt inherits 40 years of history and success, but he has to start again from scratch. BMW has to be reborn for a third time. But this time they will get it right!
Birth, act three
In order to preserve BMW’s reputation, Quandt refuses to launch any models in a hurry. While the team works on new models, he keeps the 700 in the catalogue.
Its classic body is due to a brilliant design by Giovanni Michelotti and its lightness (630 kg) is a perfect marriage with the 30 HP air-cooled motorcycle engine. The 700 is the success that will save BMW. Available in a sedan, standard and long, coupe and convertible, 176,600 units of the 700 are produced between 1959 and 1965 (3,000 of which are sold in the United States).
In 1962, the 1500 is launched, in a 4-door compact and sports model, inaugurating the “New Class”. The following year, the more powerful 1800 is launched; more than 160,000 units of this model are produced in 9 years. These luxurious but sporty models of the sixties establish the basis of today’s BMW.
1963 ends profitably. Quandt can proudly announce the payment of a dividend. BMW revives a tradition and the racing successes increase.
The brilliant Paul G. Hahnemann develops a new business strategy. Henceforth, BMW will no longer take on the non-specialists, but will conduct a “niche market policy”.
The catastrophes are over. 50 years later, prosperity continues!