The Daimler-Benz company's virtual monopoly on the production of aircraft engines in Germany stifled research and development of other engines. As a result, when the Allies introduced a new generation of high-performance engines in 1916, Germany found itself without a suitable replacement for its now-obsolete standard aircraft power plant, the 119 kw (160-shp) Daimler-Benz Mercedes.

Believing that he had a solution to the crisis, Daimler-Benz designer Max Fritz proposed a new engine that used the same technology as the older Mercedes. But his ideas met with resistance, so Fritz left and joined Bayerische Motoren Werke (BMW). There he designed an engine that retained the 6-cylinder in-line configuration of the earlier Daimler-Benz engines, but was superior in many respects.

The BMW Model IIIa had unusually low fuel consumption and very good performance at high altitudes. This was the result of a choked down carburetor setting and a high compression ratio. It powered such aircraft as the Fokker D VII.