[2] Meanwhile, BMW AG restarted manufacture on a much smaller scale, starting with pots and pans, and eventually moving up to household hardware and bicycles.

Eventually, with permission from the U.S. authorities and funding from the banks under which BMW had been put into receivership, they began manufacturing motorcycles in 1948.

[3] To end Autovelo's continued trademark infringement, the Eisenach branch of BMW was dissolved effective 28 September 1949 and was legally severed as at 11 October.

[3] Kurt Donath, technical director of BMW and general manager of the Milbertshofen factory,[3] was soliciting manufacturers, including Ford and Simca, to produce their vehicles under licence.

Called the BMW 331, the prototype used a 600 cc motorcycle engine, a four-speed gearbox, and a live rear axle.

The four-speed gearbox was not bolted to the engine, but was a separate shaft-driven unit mounted between the second and third crossmembers.

[5] The steel body was far heavier than Schimanowski had calculated it to be, resulting in the completed car having a dry weight of 1,430 kilograms (3,150 lb).

The car featured a robust chassis providing above average side impact protection, an unusually short steering column with the steering gear set well back from the front of the car, and a fuel tank placed in a carefully protected location above the rear axle in order to minimize fire risk in the event of an accident.

[citation needed] The 501 was introduced to the public in April 1951 at the Frankfurt Motor Show,[7][8] as was its less expensive, production-ready rival, the Mercedes-Benz 220.

[5][7] Development issues delayed the start of production until late 1952,[7] and even then BMW still did not have equipment for pressing body panels in operation.

[10] A road test of the 501 in March 1953 by Auto- und Motorrad-Welt reported better than average wind resistance, as well as good ride quality and an effective heating system.

[10][12] Using the same chassis and basically the same body as the 501,[10] the 502 was more luxuriously appointed[10][12] and, with its light V8 engine producing 100 horsepower (75 kW) with a single two-barrel Solex carburettor,[10][14] was much faster.

[10][12] The published top speed of 160 km/h (99 mph) was far higher than that of the first six-cylinder version of the Ponton Mercedes launched the same year.

[15] The 502 was acclaimed as Germany's first post-war V8 powered car,[15] but its high price of DM17,800 led to low sales; only 190 were sold in its first year of production.

[17][18][19] The cars were continued under these model designations until 1961 with only two notable changes: Power steering became an option in 1959, while front disc brakes were added in 1960.

[17] The engine made its debut in four new cars at the show, the 507 two-seat convertible, the 503 coupe,[20][21] the 505 limousine prototype,[21] and the BMW 3.2, a development of the 502 that did not have a model number and was identified simply by its displacement in litres.

[28] The body was designed and built by Bertone and shipped to BMW's factory in Munich, where it was fitted to a 3200S chassis.

Munich police force used seventeen 501 patrol cars, which were used for about 10 years and about 130,000 service kilometers before being retired.

During the 1950s, the sector was increasingly dominated by Mercedes-Benz, and 501 volumes never approached those achieved by Stuttgart built competitors.

The relatively low sales volumes achieved by the 501 was one among various reasons offered by commentators for the company's financial woes.

Matters came to a head when a Daimler-Benz takeover was threatened, averted in 1959 only with Herbert Quandt’s dramatic rescue of the company.