The Growth of BMW The Early years-1913-1920 Circa 1913 Karl Rapp establishes Rapp-Motorenwerke He manufactures his own aircraft engines However,they suffer from problems with vibration that Rapp is unable to fix Switches to building Austro-Daimler aircraft engines under license . Circa 1913 Gustav Otto sets up a shop building small aircraft. Son of the inventor of the four-stroke internal combustion engine He enjoys great success with his Bayerische Flugzeugwerke. Circa 1916 The Bayerische Flugzeugwerke AG BFW is founded. Gustav Otto merges his three-year-old aircraft factory Rapp owns the Rapp Motoren Werke, which is renamed Bayerische Motoren Werke GmbH first CEO is Franz-Josef Popp. Circa 1917 Two Austrians, Franz-Josef Popp and Max Friz , backed by a Vienna financier, Camillo Castiglioni, take over Rapps business and rename it Bayerische Motoren Werke BMW BMWs first aircraft engine -- the Type IIIa -- goes into production. Circa 1917 A water-cooled six-cylinder inline engine, it features a unique high-altitude carburetor Allows it to develop full power at altitude. Developed by Friz Circa 1918 The Bavarian Motor Works becomes a public company BMWs first notable success was the 6-cylinder BMW IIIa engine Powered a biplane to 5,000 meters altitude in just 29 minutes. Circa 1919 Franz Zeno Diemer sets a world altitude record record of 9,760m 32,013 ft. in an aircraft powered by a BMW Type IV engine. The Treaty of Versailles prohibits the production of aircraft in Germany Otto closes his factory BMW switches to manufacturing railway brakes .