In 1913, Karl Friedrich Rapp and Gustav Otto founded two separate aircraft factories that would later merge to form BMW or Bayerische Motoren Werke AG (Bavarian Motor Works). Rapp and Otto actually had little to do with BMW’s manufacturing of cars. Josef Popp, Max Friz and Camillo Castiglioni were the ones who played big roles in making BMW a modern car manufacturer.
The circular BMW logo was a representation of a spinning propeller of a Bavarian Luftwaffe. At the time, aircrafts were painted with regional colors and the colors of the Bavarian flag were white and blue. It is said that the pilot saw the propeller as alternating segments of white and blue, hence the logo. The roundel was a nod to Karl Rapp’s original company.
During World War I, BMW was a major supplier of airplane engines
(and later airplanes such as the Red Baron) (thanks Redditors!) to the German government. After the war, Germany was forbidden by the Treaty of Versailles to manufacture airplanes and BMW was forced to change its business: it first made railway brakes before making motorized bicycle, motorcycles and cars.
German engineer August Horch, who used to work for Karl Benz, founded his own automobile company A. Horch & Cie in 1899. A decade later, he was forced out of his own company and set up a new company in another town and continued using the Horch brand. His former partners sued him, and August Horch was forced to look for a new name.
When Horch was talking to his business partner Franz Fikentscher at Franz’s apartment, Franz’s son came up with the name Audi:
During this meeting Franz’s son was quietly studying Latin in a corner of the room. Several times he looked like he was on the verge of saying something but would just swallow his words and continue working, until he finally blurted out, “Father – audiatur et altera pars… wouldn’t it be a good idea to call it audi instead of horch?”. “Horch!” in German means “Hark!” or “listen”, which is “Audi” in Latin. The idea was enthusiastically accepted by everyone attending the meeting. (Source: Wikipedia, A History of Progress (1996) – Chronicle of the Audi AG)
And so Audiwerke GmbH was born in 1910. In 1932, four car makers Audi, Horch, DKW, and Wanderer merged to form Auto Union. The logo of Auto Union, four interlinked rings that would later become the modern Audi logo, was used only in racing cars – the four factories continued to produce cars under their own names and emblems.
Four car companies became Auto Union (1932)
Fast forward to 1985 (skipping a whole lot of history), when Auto Union ultimately became the Audi we know today.