BMW M GmbH (previously: BMW Motorsport GmbH) is a subsidiary of German car manufacturer BMW AG.
BMW M, "M" (for Motorsport) was initially created to facilitate BMW’s racing program, which was very successful in the 1960s and 1970s. As time passed, BMW M began to supplement BMW's vehicles portfolio with specially modified higher trim models, for which they are now most known by the general public. These M-badged cars traditionally include modified engines, transmissions, suspensions, interior trims, aerodynamics, and exterior modifications to set them apart from their counterparts. All M models are tested and tuned at BMW's private facility at the Nürburgring racing circuit in Germany. BMW M also remains the only performance based company to cater motorcycles at the same time, specifically the BMW S1000RR.
The brand first assembled under the BMW Motorsport name in 1972, and for much of the 1970s, its activities were limited to BMW’s racing efforts. This changed, of course, with the M1 supercar in 1978. Essentially a homologation special, the production M1 was sold so BMW Motorsport could send it racing. It was BMW’s first M-badged road car, and it set the stage for more M models down the road.
Although its focus remained on racing, BMW Motorsport followed up on the M1 with M versions of the 6-series coupe (M635CSi) and 5-series sedan (M535i) in the early 1980s. In 1984, the inline-six from the M1 found its way under the hoods of the M635CSi coupe and M5. The first M3 arrived in 1986; this fantastic E30-based model was yet another M car created to fulfill racing homologation rules, and it was quite literally a race car for the street. In 1993, BMW Motorsport changed its name to BMW M GmbH and went on to craft M versions of virtually every BMW street car. More recently, the division has widely adopted turbocharging and has M-ified vehicles heretofore thought to be un-M-ifiable, namely, SUVs. Some see such practices as heresy, but there’s no denying the division has churned out some pretty special stuff over the past four decades.
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Information taken from Wikipedia, Car & Driver. This page is not afiliated with BMW.