BMW was established as a business entity following a restructuring of the Rapp Motorenwerke aircraft manufacturing firm in 1917. After the end of World War I in 1918, BMW was forced to cease aircraft-engine production by the terms of the Versailles Armistice Treaty. The company consequently shifted to motorcycle production as the restrictions of the treaty started to be lifted in 1923, followed by automobiles in 1928 to 29.
The first car which BMW successfully produced and the car which launched BMW on the road to automobile production was the Dixi, based on the Austin 7 and licensed from the Austin Motor Company in Birmingham, England. BMW's first significant aircraft engine, and commercial product of any sort, was the BMW IIIa inline-six liquid-cooled engine of 1918, known for good fuel economy and high-altitude performance. With German rearmament in the 1930s, the company again began producing aircraft engines for the Luftwaffe. The factory in Munich made ample use of forced labour: foreign civilians, prisoners of war and inmates of the concentration camp Dachau .
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