The abbreviation BMW stands for "Bayerische Motoren Werke" the Bayerische motor factory.  The company was founded in 1916 in Munich and at first exclusively produced aircraft engines. The image has its origins in World War I, when the Bavarian Luftwaffe flew planes painted in Bayern blue and white, affording the pilot a view through his propellor of blue and white segments.  This inspired the stylized design. The first engine to bear the BMW name was the Type IIIa water-cooled six-cylinder aircraft engine.  This was short lived as the WWI ended with the Versailles Treaty forbidding Germany from building military aircrafts.
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In 1923 the company released its first motorcycle and it started making cars in 1932.

The Dixi (based on an Austin 7 design) became the first vehicle to carry the famous BMW logo.

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