The earliest internal combustion, petroleum fueled motorcycle was the Daimler-Maybach Petroleum Reitwagen. It was designed and created by the German inventors Gottlieb Daimler and Wilhelm Maybach in Bad Cannstatt, Germany in 1885. This vehicle was unlike either the safety bicycles or the boneshaker bicycles of the era in that it had zero degrees of steering axis angle and no fork offset, and thus did not use the principles of bicycle and motorcycle dynamics created nearly 70 years earlier. Instead, it needed two outrigger wheels to remain upright while turning. The inventors called their creation the Reitwagen ("riding car"). It was designed as an appropriate testbed for their new engine, rather than a true prototype vehicle. Numerous authorities who exclude steam powered, electric or diesel two-wheelers from the definition of a motorcycle, credit the Daimler Reitwagen as the world's first motorcycle.
If a two-wheeled vehicle with steam propulsion is considered a motorcycle, then the earliest was the French Michaux-Perreaux steam velocipede of 1868. This was preceded from the American Roper steam velocipede of 1869, built by Sylvester H. Roper Roxbury, Massachusetts. Roper demonstrated his machine at fairs and circuses in the eastern U.S. in 1867, and built a total of 10 prototypes.
In 1894, Hildebrand & Wolfmüller became the earliest series production motorcycle, and the earliest to be called a motorcycle (German: Motorrad). In the first period of motorcycle history, many producers of bicycles adapted their designs to accommodate the new internal combustion engine. As the engines became more powerful and creations outgrew the bicycle origins, the number of motorcycle producers increased.
Until World War I, the biggest motorcycle manufacturer in the world was Indian, producing over 20,000 bikes per year. By 1920, this decree went to Harley-Davidson, with their motorbikes being sold by dealers in 67 countries. By the late 1920s or early 1930s, DKW took over as the biggest manufacturer.
After World War II, the BSA Group became the biggest producer of motorcycles in the world, producing up to 75,000 bikes per year in the 1950s. The German company NSU held the position of biggest manufacturer from 1955 until the 1970s.
In the 1950s, streamlining began to play an increasing part in the progression of racing motorcycles and the "dustbin fairing" held out the possibility of large changes to motorcycle design. NSU and Moto Guzzi were in the vanguard of this progression, both making very different designs well ahead of their time. NSU produced the most advanced design, but after the deaths of four NSU riders in the 1954–1956 seasons, they discontinued any further development and quit Grand Prix motorcycle racing. Moto Guzzi made competitive race machines, and by 1957 nearly all the Grand Prix races were being won by streamlined machines. The following year, 1958, fully enclosed rigid, transparent, platic sheets (fairing(s)) were outlawed from racing by the FIM in the light of the safety concerns.
From the 1960s through the 1990s, small two-stroke motorcycles were in demand worldwide, partly as a result of East German Walter Kaaden's engine work in the 1950s.
Today, the motorcycle industry is mainly dominated by Japanese companies such as Honda, Kawasaki, Suzuki, and Yamaha, although Harley-Davidson and BMW still are popular and supply considerable markets. Other major makers include Piaggio group of Italy, KTM, Triumph and Ducati.
In addition to the bigger capacity motorcycles, there is a market in smaller capacity (less than 300 cc) motorcycles, mostly concentrated in Asian and African countries. An example is the 1958 Honda Super Cub, which went on to become the largest selling vehicle of all time, with its 60 millionth unit produced in April 2008. Today, this area is dominated by mostly Indian companies with Hero Honda emerging as the world's biggest manufacturer of two wheelers. For example, its Splendor (Hero Honda) unit has sold more than 8.5 million to date. Other big producers are Bajaj and TVS Motors.