AUDI AG can look back on a multi-faceted history that has seen considerable change; its tradition in the manufacturing of cars and motorcycles stretches back to before the turn of the century. The marques which were originally all based in Saxony – Audi and Horch in Zwickau, Wanderer in Chemnitz-Siegmar and DKW in Zschopau – made a significant contribution to the progress of the automotive industry in Germany. These four marques merged in 1932 to form Auto Union AG. In terms of the sheer number of vehicles built, this was the second-largest motor vehicle company of its day. Four interlinked rings were adopted as its marque emblem. After the Second World War, Auto Union AG’s production plant in Saxony was expropriated and dismantled by the occupying Soviet forces.
A number of the company’s senior managers departed for Bavaria, where a new company under the name of Auto Union GmbH was founded in 1949 in Ingolstadt, upholding the motor vehicle tradition under the sign of the four rings.
Auto Union GmbH and NSU merged in 1969 to form Audi NSU Auto Union AG; this the company was renamed AUDI AG in 1985 and its headquarters transferred to Ingolstadt. The four rings remains the company’s emblem to this day.
August Horch, one of the pioneering figures of Germany’s automotive industry, was the figure behind this company. A graduate of the Technical College in the town of Mittweida, Saxony, he originally worked in engine construction at Carl Benz in Mannheim, gradually working his way up to the position of head of motor vehicle construction. In 1899 he decided to set up business on his own, and founded Horch & Cie. in Cologne. He was the first in Germany to use cast aluminium for his cars’ engines and gearbox housings, a cardan shaft served as the power transmission element, and the gearwheels were of high-strength steel. In 1902 he moved to Reichenbach in Saxony, then on to Zwickau in 1904. Cars with two-cylinder engines were built from 1903, with four-cylinder versions being added after the start of the company’s operations in Zwickau. Their performance was so impressive that a Horch car triumphed in the 1906 Herkomer Run, the world’s most arduous long-distance race. Two years on, the company recorded annual sales of over 100 cars for the first time.
After a disagreement with the board of directors and the supervisory board, in 1909 August Horch quit the company he had founded, without delay setting up another motor vehicle company in Zwickau. As his name was already in use by the original company and had been registered as a trademark, he arrived at the name of the new company by translating his name, which means “hark!”, “listen!”, into Latin: Audi.
August Horch moved to Berlin in the 1920s and was appointed a member of the supervisory board of Auto Union AG in 1932, continuing to be involved in the company’s technical development work mainly in his capacity as expert. In 1944 he moved from Berlin to the Saale region. Horch spent his final years in Münchberg, Upper Franconia, where he died in 1951 at the age of 83.
August Horch demonstrated hands-on involvement in the development of the motor car from its very earliest days. His principal legacy is that his technical innovations, coupled with his remarkable resolve, paved the way for the transformation of the early motor vehicle into the car as we know it.
The company which still bore the name Horch originally adhered to a range of model types, the structure of which was still the one created by the company’s founder. After the First World War, the aircraft engine company Argus-Werke, acquired a majority interest in Horch. Two of the most renowned engineers, Arnold Zoller and subsequently Paul Daimler, son of Gottlieb Daimler, were thus elevated to the rank of chief designers for Horch-Werke’s operations in Zwickau.
In autumn 1926, Horch-Werke unveiled a new model driven by an eight-cylinder inline engine created by Paul Daimler. This engine was notable for its reliability and refinement, and set the standard which all competitors sought to emulate. The Horch 8 became synonymous with elegance, luxury and superlative standards in automotive construction.
In autumn 1931, Horch-Werke of Zwickau launched its newest top product at the Paris Motor Show: a sports convertible with twelve-cylinder engine, painted brilliant yellow, with a brown soft top and upholstered in green leather. Between 1932 and 1934, only 80 of this exclusive Horch were sold. The market for such luxury cars slumped. Horch was the clear market leader in the entire deluxe class and it sold one-third more cars than its competitors; for instance, Horch sold 773 cars in Germany in 1932 and was able to export around 300. However, this was not enough. The company encountered financial difficulties, mainly due to the financing of its sales operations.
Following August Horch’s departure from Horch-Werke AG in 1909, he set up another factory which was likewise to manufacture automobiles. As Horch was not allowed to use his own name for this second company, he took the Latin translation of his name, which means “hark!”, “listen!”, and gave his new Zwickau-based company the name Audi. In 1910, the first new cars with the brand name Audi appeared on the market. They earned particular acclaim for an unparalleled string of victories between 1912 and 1914 in the International Austrian Alpine Run, generally acknowledged to be the most difficult long-distance race in the world. After the First World War, Audi distinguished itself by becoming the first brand to position the steering wheel of its production cars on the left and to move the gear lever to the centre of the car. This resulted in much easier operation.
1923 was the year in which Audi’s first six-cylinder model made its appearance. This car had an oil-wetted air cleaner, at that time definitely the exception. It was years before the air cleaner became a standard feature on all cars. This Audi also boasted one of the first hydraulic four-wheel brake systems to be used in Germany, designed and built by the company itself. In 1927, chief designer Heinrich Schuh brought the first Audi eight-cylinder model, known as the “Imperator”, onto the market. Unfortunately, this imposing car made its appearance too late: the deluxe car market was suffering a rapid decline in fortunes. The company was purchased in 1928 by Jörgen Skafte Rasmussen, the figure behind the mighty DKW empire.
Jorgen Skafte Rasmussen, a Dane by birth, established his first company in Saxony after studying Engineering in Mittweida. In 1904 he set up an apparatus engineering company in Chemnitz, three years later moving to Zschopau, in the Erzgebirge region, where he began to experiment with steam-driven motor vehicles in 1916. Although these experiments did not lead to any specific product, they yielded the company name and trademark DKW, derived from the German words for “steam-driven vehicle” (Dampf Kraft Wagen). In 1919, Rasmussen obtained the design of a two-stroke engine from Hugo Ruppe, a tiny version of which he sold as a toy engine under the name of “Des Knaben Wunsch”, meaning “The Boy’s Dream”. This mini engine was subsequently upscaled and used as an auxiliary cycle engine, evolving into a fully-fledged motorcycle engine called “Das Kleine Wunder” (The Little Miracle” in 1922. Under the watchful eye of J. S. Rasmussen (together with manager Carl Hahn and chief designer Hermann Weber), DKW became the biggest motorcycle manufacturer in the world in the 1920s. DKW also enjoyed a leading international position as an engine manufacturer.
In 1927, Rasmussen had acquired design and production facilities for six- and eight-cylinder engines from a Detroit automobile company which had been wound up. Two new Audi models powered by these engines appeared on the market. However, Rasmussen recognized the signs of the times and stepped up his activities in small cars. The very first DKW cars actually had rear-wheel drive and were built in Berlin-Spandau. At the end of 1930, Rasmussen commissioned the Zwickau plant to develop a car having the following design features: a two-cylinder, two-stroke motorcycle engine with a swept volume of 600 cc, a unitary wooden chassis with leatherette upholstery, swing axles at the front and rear, and front-wheel drive. The car which Audi designers Walter Haustein and Oskar Arlt came up with was given the name DKW Front. It was unveiled at the 1931 Berlin Motor Show, where it caused something of a sensation. The DKW Front was built at the Audi factory, and went on to become the most-produced, most popular German small car of its day.
The name “Wanderer” dates back to 1896, when its fame was associated with the bicycles built by Winklhofer & Jaenicke, a company founded in 1885 in Chemnitz. Production of motorcycles commenced in 1902, and the first trial production of motor cars took place in 1904. A small car under the name of “Puppchen” went into series production in 1913, and proved very popular. No higher-performance successor appeared until 1926, when the Wanderer Type W 10 with 1.5 litre engine and developing 30 hp made its début. This car incorporated all the latest developments in the world of automotive engineering, such as left-hand drive and a central gear lever, a multiple dry-plate clutch, a unitary engine block and gearbox, and a four-wheel brake system. This car met with an excellent market reception.
To cope with the overwhelming demand, a new production plant was built in the Chemnitz suburb of Siegmar. Parts continued to be produced at the existing factory, and were then transferred to the other plant by rail. Individual parts and assemblies were unloaded directly from the rail wagons onto the assembly line: just-in-time methods at the end of the 1920s! The buffer store in Siegmar had capacity for parts for only 25 cars ? as many as could be built in a single day.
Wanderer’s marque image was characterized by its extremely reliable cars and by their outstanding manufactured quality. Such excellence had its price, however, and at the end of the 1920s Wanderer attempted to stem the looming crisis with more modern body designs and higher-performance engines. Despite these innovations, production figures slumped. Wanderer’s car production operations fell into the red. The entire motorcycles division had already been sold off to NSU and the Czech company Janecek. This prompted Dresdner Bank, Wanderer’s largest shareholder, to promote plans to sell off the automotive division and to expand the profitable machine tools and office machinery operations.
Auto Union AG
In common with the automotive industry as a whole, the 1920s were a period of rationalization at Audi, Horch, DKW and Wanderer. Line assembly and modern machine tools had resulted in a sharp rise in production capacity, yet mass production could only work if there was corresponding market demand. Promoting sales to the necessary degree was a costly affair, and the price war triggered off by stronger competition from abroad also devoured large amounts of money. The German car industry found itself frequently unable to finance all this from its own profits, and sources of credit were needed.
In Saxony, the State Bank of Saxony had more or less satisfied Horch-Werke’s needs for capital loans, and had also paved the way for the expansion of the Rasmussen Group. The State Bank of Saxony eventually resolved to consolidate its interests in the automotive trade, and the idea of Auto Union was born. The absorbing company was Zschopauer Motorenwerke J. S. Rasmussen AG, which already owned Audi-Werke AG. Horch-Werke AG was also placed under its control, as was Wanderer-Werke’s car division through a purchase and leasing agreement. Its share capital totalled 14.5 million Reichsmarks, with the State Bank of Saxony controlling an 80 % interest.
The creation of a competitive structure The image of Auto Union AG on the motor vehicle market was shaped by the four founder marques Audi, DKW, Horch and Wanderer, together with their products. It took years to develop a consistent corporate concept and apply it to this chance constellation of highly traditional companies.
At the 1933 German Automobile Exhibition, in which Auto Union participated for the first time in its new corporate form, the Audi marque caused a stir with its front-wheel drive for midsize cars. However, the innovative nature of this development was not reflected in higher registration figures, with avant-garde technology evidently proving to have only marginal market appeal. The concept was modified and in 1938 the Audi 920, a car which was externally very modern in design, with a high-performance engine, was launched on the market. Its newly developed OHC engine developed 75 hp, propelling the car to a top speed of 140 km/h. This Audi was aimed at customers who wanted a powerful car, but not necessarily a large one; an Audi for dynamic, sports-minded drivers. Front-wheel drive subsequently yielded to rear-wheel drive again, and the conventional profile-type chassis was adopted instead of a central box-type chassis. The car was available as a 6-window saloon and as a two-door convertible with four windows. Demand for the Audi 920 was so high that more than a year’s production output was sold out only shortly after its launch.
At that time, the fame of the DKW marque was based primarily on its motorcycles. In 1933, the model range comprised eight different types with engines ranging from 175 to 600 cc. One year later, the RT 100 appeared on the market. With its simple, straightforward body and its combination of economy and power, it set standards that remained valid for several decades. The RT was available for an unbeatable 345 Reichsmarks, and became one of the most-produced motorcycles of all time.
The 200 Class nevertheless continued to underpin the success of the motorcycle operations in Zschopau. DKW enjoyed a clear market lead here, a fact unchanged by the appearance of the NZ series in 1938. These attractive models in the middle and upper displacement class, with four-speed gearbox, foot gearshift mechanism and rear suspension, were a fitting reflection of the advanced development status of DKW two-stroke motorcycles.
DKW’s small cars were produced both in Berlin-Spandau (rear-wheel drive and charge-pump V4 two-stroke engine) and in Zwickau (front-wheel drive, two-cylinder, two-stroke inline engine). All engines were built in Zschopau, whereas the DKW wooden chassis for the front-wheel-drive DKWs assembled in Zwickau were manufactured in Spandau. The German rail operator, the Reichsbahn, transported daily shipments of vehicle bodies to Zwickau for eight marks per body.
The DKW front-wheel-drive cars (bearing the type designations F2, 4, 5, 7 and 8) were available in two classes: the “Reichsklasse” (600 cc engine, 18 hp) and the “Meisterklasse” (700 cc engine, 20 hp). “Front Luxus” was the name of the beautiful convertible with a sheet steel body. The DKW Front models remained the most popular and best-selling small cars in Germany: in the 1930s, a quarter of a million of these cars were sold. Their front-wheel drive gave them something of a pioneering character. The F9 was the designated successor to the models built both in Spandau and Zwickau, with its new three-cylinder engine developing 28 hp and sheet steel body. It was scheduled to enter production in 1940, but then the war intervened.
Horch’s reputation for exclusive cars built in Zwickau stretched back several decades. The engines in particular served as a benchmark and were considered exemplary for both their performance characteristics and their refinement. Economy was not an issue in the deluxe class, and the “Horch 8″ came to be regarded as the zenith of quality. The V8 engine developed by Fritz Fiedler was launched in 1933, initially as a 3.0 litre version; 3.5 litre and then 3.8 litre versions followed, and its power output edged up from 70 to 92 hp. Compared with the eight-cylinder inline engine developing a hefty 120 hp, it was nevertheless still the “small” Horch. Both automobile types were initially rigid-axle models whose driving properties became something of a problem at higher speeds.
In 1935, Horch’s cars were given independent front suspension and a De Dion axle at the rear (double universal joints with a rigid axle and frame-mounted differential). The Type 853 sports convertible with eight-cylinder inline engine, considered by many to be the most beautiful Horch ever built, made its début in the same year. The Horch marque was easily able to assert its leading position in the deluxe class; in 1937, it held a market share in excess of 50 percent in the 4 litre and upwards class.
Wanderer’s cars were already being propelled by the new overhead camshaft engine designed by Professor Porsche before the Auto Union era. New, modern suspension layouts and body versions were therefore developed on this basis. A rear swing axle in conjunction with a rigid front axle appeared in 1933 on the Type W 21 and 22, with independent front suspension finally being adopted for the W 40, 45 and 50 in 1935. Models with three-figure code numbers (W 240, 250, etc.) represented the transitional phase between the two.
The dependable but very expensive OHV engine was replaced by a side-valve engine of identical power output from 1937 on. The W 24 (four-cylinder) and W 23 (six-cylinder) models first appeared on the market with these engines in 1937. The engines were standardized and the chassis largely coordinated (rigid rear axle and raised transverse springs). Auto Union’s new line of body versions first appeared on the 1936 Wanderer model W 51. From then on this line, which was inspired by American models, was echoed by all new Auto Union vehicles to a greater or lesser degree.
In the same way that Auto Union was originally simply a new name for long-established products, the management too initially adhered to existing structures. At first, the group was managed from Zschopau (DKW’s home). In 1936 the group’s new office building in Chemnitz was completed, following conversion work. This signalled the end of separate vehicle development activities at each location: the Central Design Office and Central Testing Department were opened in Chemnitz. New group vehicles were now developed and tested here, and the prototype and a set of drawings were then handed over to the production plant.
Particular emphasis was placed on the development of two-stroke engines. Auto Union had acquired an exclusive licence from Klöckner-Humboldt-Deutz for the utilization of the Schnürle patents (the reverse scavenging principle in the two-stroke engine) for its small engines. The crucial advantage of this principle was that it significantly cut fuel consumption, while boosting power output.
Wanderer’s engines were standardized, and the Horch V8 was destined to be replaced by a six-cylinder inline engine (offering higher output and greater refinement). Auto Union had made considerable progress in the development of automatic transmissions, and Auto Union’s engineers were now seeking new methods of styling and materials selection for their body development work.
The Central Body, Development and Design Office pursued the idea of streamlining from the very outset, using the patents of the Swiss aerodynamics expert Paul Jaray as its basis. The optimum aerodynamic properties were first calculated by theoretical methods, then tested out in the wind tunnel. Production-ready body versions of the DKW F9 achieved an astonishing frontal drag coefficient of cD = 0.42 (the figure for the predecessor model, the F8, was 0.58)! Even decades later, this was still par for the course for German production vehicles.
Prompted by the shortage of iron and rubber due to the arms race, coupled with the fact that wooden chassis with leather upholstery were now too costly to build (in view of the intensive manual labour required), Auto Union began development work on a plastic body in conjunction with Dynamit AG in Troisdorf. An empirical crash testing programme was developed to assess the strength of wood, sheet metal and plastic ? the first in the history of the German automobile industry.
Sideswipes and lateral and offset frontal rollovers were simulated in the Central Test Laboratory in Chemnitz. Its technical division investigated all matters relating to the materials, developed alloys and special production methods, and investigated the technological suitability of all new designs. The scientific division concentrated on future engine versions, the development of transmissions, the investigation of vibration and noise, and preparations for complex tests such as the positioning of the catapults used in crash tests. The road testing division handled the practical testing programme, series testing and monitoring, and comparative testing of competitors’ products.
Auto Union enjoyed rapid expansion between 1933 and 1939: its consolidated sales rose from 65 to 276 million Reichsmarks, and the workforce grew from 8,000 to over 23,000. Annual production output of motorcycles soared from 12,000 to 59,000, and car production climbed from over 17,000 units to more than 67,000 per year. Compared with the year of Auto Union’s founding, output of Horch cars had doubled by 1938, production of Wanderer cars was more than five times as high, and the total for DKW cars had actually risen to ten times the level at the time of the merger.
War and liquidation
The outbreak of the Second World War brought to an end this development. Auto Union AG built its last civil vehicles in 1940. From then on, it was obliged to heed official instructions and focus its production operations on the war effort.
Auto Union AG was in existence for 16 years. For its last three years it was in effect merely awaiting liquidation, and for six years previous to that, the war had caused its automotive operations to be paralysed. Auto Union’s wealth of innovation and meteoric growth all took place within the space of its first seven years. The innovation and skill of its automotive experts is reflected in over 3,000 patents granted both in Germany and elsewhere. One in four passenger cars registered as new in Germany in 1938 was built by Auto Union. More than one-third of all newly registered motorcycles in Germany were DKWs. Auto Union AG was the behind numerous technical developments, research findings and ideas that played a pioneering role in the creation of the modern-day car.
After the end of the war, Auto Union AG’s production facilities were expropriated and dismantled by the occupying Soviet forces. In 1948 the company was deleted from the trade register of the city of Chemnitz. By this time, several of Auto Union AG’s senior management had moved to Bavaria, where the company had found a new home in Ingolstadt.
A new beginning in Ingolstadt
A new company bearing the name Auto Union GmbH came into being on September 3, 1949 in Ingolstadt, to uphold the automotive tradition of the four rings. It is this company that is the actual precursor of the present-day AUDI AG. From its base in West Germany, its purpose was now to maintain the tradition that the former Auto Union AG had established in Saxony.
Life at the time of its re-establishment was frugal, so small, economical vehicles were called for. In the early years, the only vehicles built in Ingolstadt with the four-ring emblem were DKW motorcycles and cars, with their typical two-stroke engines. The formal re-establishment of the company in 1949 was actually already the second step towards a new beginning after the war. The first move after “zero hour” took place on December 19, 1945, when the “Zentraldepot für Auto Union Ersatzteile GmbH” was founded in Ingolstadt. This central depot had the task of supplying spare parts for all pre-war Auto Union vehicles that had survived the ravages of the past six years; there were all of 60,000 such vehicles in the western occupied zones.
So why Ingolstadt?
One argument in favour of Ingolstadt as the home of the central depot was its good transport connections, located as it was at the heart of Bavaria. Influential figures in the Ingolstadt city authorities presented a good case in favour of the central depot, arguing that it would aid the regional employment market. However, the key reason for the re-establishment of the company in Ingolstadt was its centuries-old military tradition as a garrison town: this legacy included expansive outdoor areas and numerous barracks, outbuildings, casemates and the like ? invaluable assets at a time when there was precious little capital for erecting new buildings.
From its headquarters in the former army supplies office in Schrannenstrasse, the company was gradually able to take over a variety of other buildings such as the Friedenskaserne barracks, the New Arsenal, the NCOs’ building, the vehicle halls, the ammunition store, the riding hall and the large parade ground. As its facilities were scattered all over the city, a rational production process was scarcely possible. The workers referred to it tongue-in-cheek as the “United Hut and Shed Company.”
The “Bavarian strike”
August 9, 1954 saw the outbreak of a strike in the Bavarian metalworking industry which many inhabitants of Ingolstadt still vividly recall. This was one of the first major industrial disputes in the young Federal Republic of Germany, and companies in the metalworking sector even went so far as to call it the “most stirring and significant event of the post-war years.”
Auto Union, one of the largest employers in the city, with a workforce of around 5,000, likewise saw most of its workers lay down their tools. Their demands included a shorter working week, higher pay and better working and living conditions. The “Bavarian strike” lasted until August 31, 1954, when an agreement was finally reached through arbitration. An average pay increase of just over four percent was the outcome.
The liaison with Daimler-Benz
The “Bavarian strike” cost Auto Union around DM 920,000. 1954 was nevertheless the first year in which the company recorded a notable profit (around DM 400,000). In the same year Friedrich Flick, the majority shareholder in the iron and steel works Eisenwerk-Gesellschaft Maximilianshütte mbH Sulzbach-Rosenberg, popularly known as “Maxhütte”, acquired a financial interest in Auto Union GmbH. He realised some years previously that the Ingolstadt car manufacturer would one day need a partner with plenty of capital.
In 1957, Flick advocated the takeover of Auto Union by Daimler-Benz. At that time, he owned 41 percent of Auto Union’s shares, as well as a 25 percent stake in Daimler-Benz. He could also rely on the backing of the Swiss industrial magnate Ernst Göhner, who likewise held a 41 percent interest in Auto Union. Daimler-Benz AG accepted the offer. In view of growing pressure from foreign competition, it wanted to extend its production range in market segments lower down the range. Flick also dropped Daimler-Benz a large hint that he was in negotiation with Ford, too.
On April 24, 1958 Daimler-Benz acquired around 88 percent of Auto Union’s shares for just over DM 41 million. One year later, in 1959, the remaining shares were also sold to Daimler-Benz. Daimler’s board of management spokesman Fritz Könecke summed up the merger of Germany’s second-largest and fifth-largest car manufacturers as follows: “We have married a nice girl from a good, old-established family!” On April 9. 1958 the business newspaper “Handelsblatt” wrote: “With the takeover of Auto Union GmbH, which reports annual turnover of around DM 400 million and employs a workforce of 10,000, the Daimler-Benz Group is now once again the Federal Republic of Germany’s largest car manufacturer in terms of sales revenue, too.”
A new plant in Ingolstadt
At the time of the Daimler-Benz takeover, the only Auto Union vehicles in production in Ingolstadt were motorcycles and the DKW rapid delivery van. Auto Union’s car production operations were concentrated at the Düsseldorf plant that had gone into operation in 1950.
For want of capital, the company had put back production of a modern, low-priced small car that had been in development since the mid-1950s and that was one day to be launched under the name “DKW Junior”. Although the takeover by Daimler-Benz guaranteed the necessary funding of the long-overdue project, the company was short of the production capacity needed.
A new plant therefore had to be erected without delay ? either in Ingolstadt, or in Zons, near Düsseldorf, where the company had already acquired an industrial site. Fritz Böhm, at that time Chairman of the Works Council and a member of the State Parliament, is said by former colleagues to have “fought like a lion” to have the new factory built in Ingolstadt. Thanks to his useful contacts with the world of politics, the Free State of Bavaria was always “one step ahead” of North Rhine-Westphalia. An investment loan of DM 25 million from the Bavarian State Bank played a major part in the company’s ultimate choice of Ingolstadt.
Another factor which argued in Ingolstadt’s favour was the impending collapse in business for two-wheelers: in view of plummeting demand for motorcycles, there were plans to wind down DKW motorcycle production in the short term. In contrast to the Zons location, there were considerable numbers of qualified workers available in Ingolstadt ? in the late 1950s, a major consideration whenever a company was deciding where to locate. In July 1958, construction work on the new plant in Ettinger Strasse finally began. A sum of DM 76 million was invested here in 1959, and a further DM 51 million in 1960. The regional newspaper, Donaukurier, wrote euphorically: “One of the largest and most modern car plants in Europe is currently being erected near Ingolstadt”.
The deal between VW and Daimler-Benz
At the end of 1958, Auto Union had 3,700 employees in Ingolstadt; twelve months later, the figure had soared to 5,700. The construction of the new plant not only meant that the workforce had grown dramatically. It was also the principal factor behind Auto Union’s decision to transfer its production to Ingolstadt in 1961, followed by its administrative headquarters in 1962. The desired rationalization and cost-cutting effects materialized, but from 1962 Auto Union’s production and sales figures both took a downturn, at a time when the parent company was experiencing a boom in both production and sales.
In 1964 in particular, Auto Union was confronted with acute financial difficulties. Daimler-Benz AG, increasingly going at arm’s length to a subsidiary that was proving too difficult for comfort, for all its pedigree, decided that the best solution was what turned out to be a spectacular commercial transaction: the sale of Auto Union to Volkswagen. Issue 45 of the news magazine “Der Spiegel” wrote: “Daimler-Benz’s prominent shareholder Friedrich Flick spent more than a year devising, rethinking and fine-honing the latest big scheme in his eventful career, “going on to comment that Flick had not only masterminded “the biggest business event of 1964,” but had also been instrumental in laying down its finer details.
Ownership of Auto Union GmbH was transferred to VW AG in several stages, from 1964 on. Its new owner spent a total of DM 297 million on the transaction, and by 1966 had all the company’s shares in its possession.
Good times, bad times…
The takeover by VW meant that Auto Union escaped going into receivership by a hair’s breadth. The era of the two-stroke engine, formerly so popular, was coming to an end, and almost 30,000 unsold DKW cars were destined for the scrap heap. It was the VW Beetle which came to the rescue: between May 1965 and July 1969, almost 348,000 of the VW Beetle were assembled in Ingolstadt. From August 1965, the situation was also alleviated by the launch of the new “Audi”. This car, the first one with a four-stroke engine to be built in Ingolstadt, aroused considerable market interest and established the basis of a successful model range. However, the recovery was only short-lived. After more than fifteen years of seemingly unstoppable economic recovery, in 1966/67 Germany suddenly went into a recession which hit Auto Union badly: production had to be cut back dramatically, and short-time was the inevitable consequence.
On March 10, 1969 Auto Union GmbH signed a merger agreement with NSU Motorenwerke AG (Neckarsulm). The establishment of the new company with the name Audi NSU Auto Union AG was backdated to January 1, 1969. This company, whose headquarters were in Neckarsulm, adopted a course of growth and expansion from the outset. Production of Audi and NSU cars rose steadily until 1973, when initial signs of the oil crisis emerged. In 1974, the weakening of the international economy had such an adverse effect on the market that the company had to scale down production to 330,000 vehicles, from almost 400,000 in the previous year. Such a radical measure inevitably cost a considerable number of jobs: in 1974, the total workforce fell from 33,800 to 28,600; in 1975, 1,700 jobs were lost at the Ingolstadt plant alone.
The car industry recovered at the end of 1975, a development that was reflected in the sales volume of Audi models. The last NSU Ro 80 left the assembly line in March 1977. This signalled the disappearance of the NSU brand, which dated back more than 100 years. Since that year, all cars built in Neckarsulm have borne the name “Audi”.
Audi caused a sensation in 1980 with the launch of the Audi quattro, the first volume production car with permanent four-wheel drive. Audi’s rally sport activities served to underline the revolutionary nature and overwhelming superiority of its quattro concept: in 1982, Audi became the first German brand to win the intensely fought-over Manufacturers World Championship, a feat which it repeated in 1984.
In 1982 Audi establish a record of another kind: with its drag coefficient of cD 0.30, the third-generation Audi 100 achieved the best aerodynamic performance of any volume-produced saloon in the world. Audi had come up with the right response to the challenges of the moment, at a time when there were increasing calls for environmental protection and economical use of fuel.
On January 1, 1985 Audi NSU Auto Union AG was renamed simply AUDI AG. The company’s registered headquarters were simultaneously transferred from Neckarsulm to Ingolstadt. In the mid-1980s, Audi ? along with other German car manufacturers ? began to feel the impact of a high-profile public debate on stiffer speed limits and reduced exhaust emissions. Whereas domestic sales fell by 7.5 percent in 1985, exports rose by 9.4 percent.
In 1985, AUDI AG’s capital investments totalled almost DM 1 billion, the highest figure in the history of the company. Product-related measures and new production technology were the investment priority. In autumn 1986, the new Audi 80 with fully galvanized body was launched. It came complete with a ten-year warranty against rust penetration, setting new standards in this class. 1988 saw the appearance of the V8, Audi’s first deluxe-class car, with a 3.6 litre V8 engine and four-valve technology.
Audi’s slogan “Vorsprung durch Technik” ?meaning “Advancement through Technology”, even though the German version may actually be more familiar in the English-speaking world ? is also substantiated by the TDI engine concept. Its extremely low fuel consumption was documented impressively in several economy test runs: in 1992, a standard Audi 80 TDI drove all round the world, covering a distance of 40,273 km and clocking up an average consumption figure of 3.78 litres of fuel per 100 km (74.7 mpg) and an average speed of 85.8 km/h.
In the early 1990s, the market worldwide was generally weak, but the fall of the Berlin Wall and German monetary union generated an immense surge in demand on the domestic market. This sales boost on its home market helped Audi achieve record-breaking sales revenues of DM 14.8 billion in 1991. However, by 1993 it was obvious that the special boom in Germany had only been able to allay the general downward trend for a couple of years.
Audi heralded in a new era in presenting the ASF (Audi Space Frame) aluminium study vehicle in autumn 1993 at the Tokyo Motor Show. The aluminium Audi celebrated its world début in March 1994, as the successor to the Audi V8. The new model designation A8 signalled a radical shift in Audi’s model-naming policy. The Audi A6 followed in the summer, with the new A4 being launched in November 1994. This latter model rapidly brought further success to the company: in 1995, 120,000 of the Audi A4 were sold in Germany alone.
In autumn 1995, Audi produced its next trump in unveiling the sports car studies TT Coupé and TT Roadster: these concepts successfully blended distinctive automotive design based on nostalgic throwbacks with modern stylistic features and mature technology. One year on, Audi launched the A3, an attractive two-door compact model intended to draw new customer groups to the brand. In 1997, Audi presented the new Audi A6 and also the Al2 study vehicle, the latter an all-aluminium model based on second-generation ASF technology. The Audi TT Coupé and Audi TT Roadster production models were launched in 1998 and 1999.
Audi entered the new millennium with an attractive and future-oriented model range. June 2000 saw the launch of the Audi A2, a vehicle that once again emphasised the competence of Audi in the field of lightweight aluminium design. In October of the same year, the company’s new flagship was presented at the Paris Motor Show: the Audi A8 with a powerful twelve-cylinder engine in a W-configuration. The market launch of the new Audi Cabriolet and the second generation Audi A8 in 2002 underlines the sporting character of the current Audi model range, which has been perfectly rounded off by the Audi RS6.
The spotlight at the three major international motor shows in 2003 was on three high-calibre Audi studies: the large Pikes Peak quattro all-terrain vehicle kicked off proceedings at the Detroit Motor Show. The Nuvolari quattro, a four-seater front-engined coupé with V8 biturbo engine, made its debut at the Geneva Motor Show.
The highlight of the season then came at the Frankfurt Motor Show, with the unveiling of the LeMans quattro, a 610 bhp mid-engined sports car: three design studies that map out the future direction of Audi Design and simultaneously deliver compelling evidence of Audi’s proverbial “Vorsprung durch Technik”, The new-generation Audi A3 likewise made its production debut in 2003. With engines developing up to 250 bhp and the decidedly dynamic body, the new A3 restates its claim to the title of the most sporty car in the premium compact class. Developments in the early part of 2004 were dominated by the appearance of the new Audi A6, which is poised to streak ahead in the full-size category thanks to its design and performance.
Audi is an international developer and manufacturer of high-quality cars. In 2003 the company sold more than 769,893 Audi models worldwide. Consolidated revenue totalled around EUR 23.4 billion. The total number of employees averaged more than 52,000 in 2003.
The last two pictures is a newly restored DKW Meisterklasse Universal type F 89 S from 1951. This exceptional vehicle represents a valuable addition to the collection of historic vehicles of Audi Tradition, representing as it does the resumption of passenger-car production under the sign of the Four Rings after the Second World War.