Permanyer and Bultó founded Montesa in Barcelona in 1944. Their first prototype was based on contemporary French Motobécane designs, but Permanyer quickly began producing his own gas engines. The pair collaborated to create a lightweight motorcycle powered by a 95cc two-stroke engine with no sprung rear suspension. Despite early setbacks, 22 units sold in the first year of production.
Bultó designed a successor 125cc roadster that was tested extensively in the trail rallies and semi-enduros popular in Spain at the time. The model entered the 1951 International Six Day Trials, ridden by Bultó and G. Cavestany. By the early 1950s, Montesa had developed highly competitive 125cc road racing machines featuring six-speed, bolt-on gearboxes with all gears running on needle-roller bearings. These bikes took second, third and fourth places in the Ultra-Lightweight race at the Isle of Man TT in 1956.
The company's most successful street bike of the 1950s was the Brio 80, of which more than 12,000 units were produced, generating funds for a new, larger factory in Espluges de Llobregat. However, a slump in the Spanish economy forced Permanyer to curtail racing activities. When Permanyer sought to withdraw from road racing, Bultó insisted on continuing. The dispute proved irreconcilable: in May 1958, Bultó left Montesa, taking several key personnel with him to found the rival Bultaco firm. Permanyer had lost not only his chief designer but also Bultó's 30% company shareholding.
As Spain's economy recovered, Permanyer promoted Pedro Pi from chief test rider to development engineer and appointed Leopold Milà as Technical Director. A new all-unit-construction 175cc engine was developed by 1960 to power the Impala sports roadster, which formed the basis of Montesa's future trials and motocross machines.
The 250cc engine introduced in 1965 became the cornerstone of subsequent success. In 1967 the first Montesa trials models appeared, and in 1968 the Cota — as the trials bike was renamed — won Pi the Spanish Trials Championship. Pi added this to existing road race and motocross titles before retiring from competition to focus on bike development. Montesa expanded its trials and motocross ranges substantially through the 1970s, offering models across engine sizes from 25cc to 414cc.
Ulf Karlsson won the World Trials Championship on a Cota in 1980, confirming Montesa's position as the leading force in trials motorcycle competition.
Economic difficulties returned to Spain in 1981. Montesa found itself the sole surviving major domestic motorcycle manufacturer but required significant capital to continue. A government loan and the sale of shares to Honda — which wanted a European manufacturing base to bypass restrictive import tariffs — kept production going. Honda's involvement deepened over subsequent years.
In July 1985, a major restructuring took place with a substantial Honda investment. By 1986, Honda had acquired an 85% shareholding in Montesa and spent a further five million dollars modernising the factory. Montesa continued competing in World Trials through the 1980s and 1990s with riders including former World Champion Eddy Lejeune and Andrew Codina.
The 1992–93 liquid-cooled Cota 311 represented the last purely Montesa-engineered machine. From 1994, the new Cota 314R featured an HRC Honda powerplant alongside many other Honda components, marking the full integration of Japanese engineering into what had been a Spanish product. Marc Colomer won the World Trials title on this model in 1996. The 315R that followed carried Dougie Lampkin to multiple world championships and Takahisa Fujinami to his 2004 title before being replaced by the four-stroke Cota 4RT in 2005.
Spanish trials rider Toni Bou, riding for Montesa Honda, has dominated World Trials competition since 2007, accumulating championship titles at a rate without precedent in the sport. Montesa's trajectory from a small Barcelona workshop through national champion to globally competitive Honda subsidiary — navigating economic crises, the departure of its founding designer, and the absorption into a Japanese corporate structure — represents one of the more complete stories in European motorcycle manufacturing history. Its role as the vehicle for the trials discipline's greatest modern champions gives the brand an enduring identity in the sport.