BMW M
BMW M GmbH (previously: BMW Motorsport GmbH) is a subsidiary of German car manufacturer BMW AG established in May 1972 with just eight employees. BMW M, also known as M-Technik or just "M" (for Motorsport) was initially created to facilitate BMW’s racing program, which was very successful in the 1960s and 1970s. The first racing project was BMW’s 3.0 CSL; in the late 1970s the first modified street legal road cars were produced for the contracted racecar drivers as their personal vehicles. By 1988, the amount of employees had risen to 400.
BMW M: Modified street-cars for the public
After the success of BMW M in racing venues and the growing market for high performance sports cars, M introduced cars for sale to the public. The very first M badged car for sale to the public was the M1, revealed at the Paris Motor Show in 1978. The M1, however, was more of a racecar in domestic trim than an everyday driver. The direction of the M cars changed with the 1979 release of the M535i, which was a high performance version of BMW’s popular 5-Series mid-size sedan. Since 1978 BMW M has offered modified versions of nearly every car on BMW’s production line, excluding the 7 Series and X Series sport utility vehicles. To this day BMW M continues to serve up some of the most highly tuned street-cars available in full production. BMW M offers modified engines, suspension, interior trim, aerodynamics and exterior styling. The objective of BMW M is to sell factory production sports cars that are comfortable enough for everyday use while offering uncompromised driving satisfaction and performance.
Competition
Auto tuning has become a worldwide market providing mild to exotic modifications. Many aftermarket companies have been formed that will modify your car, independent of the manufacturers control. Alpina, Dinan Cars, AC Schnitzer and Hartge are other companies who rival BMW M, taking new cars for modification and having "semi-official" status with BMW regarding warranties, etc. DaimlerChrysler is one of BMW's top competitors, and offers a similar motorsports division to their customers known as AMG. AMG, like BMW M, is an in-house tuning company that has a direct relationship within the parent company. Also, Audi AG offers similar packages on its cars, which bear an "S" badge (such as the S4, S6, and S8). However, Audi's modifications are considered more of an optional package than a special construction by an historically significant counterpart.
M-Cars vs. M-badged cars
There are several BMW models to which BMW Motorsport made changes without being full M-Cars. Vehicles which have been modified by BMW Motorsport but are not full M-Cars may feature plain 'M' badges with no number, whilst full M-Cars have 'M' badges with the model number. E.g. 'M3' or 'M5'. It should be noted however that the Z3/Z4-based M Roadster and M Coupe bore numberless 'M' badges as standard fitment.
For example, the E28 M535i featured suspension, styling, and transmission improvements over the standard 535i. These changes were carried out by BMW Motorsport, thus the car carried 'M' stripe badges on the front grille and boot, but not the full 'M5' badging. The E28 M5 was sold along side the M535i. Motorsport modifications have been made to almost every BMW model, hence it is not unusual to see 'standard' BMW's with 'M' badges.
The opposite occurred with the 850CSi where it was an M car in all but its name (it had BMW M sourced engine and it's VIN indicated that it was developed by BMW Motorsport, like all other M cars), this was possibly because a true M8 was in development. This M8 however was cancelled for reasons known only to BMW.