By the turn of the century, German aircraft manufacturer Grob Aerospace had established itself as a producer of motor gliders and trainer aircraft. However, during the mid-2000s, the company decided to embark on designing a jet-powered light aircraft; development work was carried out in relative secrecy at Grob's Tussenhausen-Mattsies facility. In response to perceived market demand, this aircraft would possess both the short-field and cargo-carrying performance traditionally associated with turboprop-powered aircraft, as well as the extensive use of composite materials. The requirements of the aircraft were defined in close collaboration with the Swiss-based company ExecuJet Aviation Group. Grob Aerospace president Dr Andreas Plesske stated of the design: "We have created a new category of jet aircraft"
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The Bf 108A first flew in 1934, followed by the Bf 108B in 1935. The Bf 108B used the substantially larger, 12.67 litre displacement Argus As 10 air-cooled inverted V8 engine. The nickname Taifun (German for "typhoon") was given to her own aircraft by Elly Beinhorn, a well-known German pilot, and was generally adopted
Development of the type continue and in 1935 the Bf 108B appeared with the fin and rudder having undergone modifications.
Conceived as a competitive aircraft the Bf 108 would take part in the 1936 Berlin Olympics.