Following the Second World War, BMW was in shambles. Sales for both their motorcycles and cars were in decline. Their models 507 and 503 were too expensive for the war-torn Germans.
BMW needed a car that could be inexpensive to build and that customers could afford. A deal was made with the Italian company Iso Rivolta to build the Isetta under license and the rest is history.
An interesting side note - Iso Rivolta also made refrigerators so, some people think the front opening door looks like a refrigerator door.