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BMW

Source: Motorcycle

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.

Source: Cartype

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.
Update 3/6/08: Neatorama readers Dan S. and Bruce Kennedy who pointed out that the idea of BMW logo being derived from spinning propeller was actually an advertisement by the company (scroll down about halfway). Also thanks to klaus who pointed us out to the logo of EMW, which BMW took over in 1928.

BMW Logos blogspot.com