The merger arose from financial pressures in the German automotive industry during the early 1930s. DKW, founded by Danish engineer Jorgen Skafte Rasmussen in 1916, had diversified from steam-powered vehicles into motorcycles and front-wheel-drive cars. Horch was founded in 1904 by August Horch in Zwickau; after a dispute, Horch left his own company and founded Audi across town in 1909. The car division of Wanderer, established in 1911, completed the quartet. The Saxony Regional Bank, which had financed Rasmussen's expansion, directed a rationalisation that produced Auto Union AG in summer 1932.
Auto Union chairman Klaus, Baron von Oertzen, sought a prestige project to announce the new brand. In 1933, German Chancellor Adolf Hitler announced state sponsorship of two automotive programmes: the people's car that became the Volkswagen, and a motor racing initiative. Ferdinand Porsche had developed a P-Wagen racing car project, and after negotiations that included a meeting in the Reich Chancellery, Hitler agreed to fund both Auto Union and Mercedes-Benz, each receiving an annual stipend of 250,000 Reichsmarks with the aim of demonstrating German engineering supremacy.
Auto Union purchased Porsche's company and the P-Wagen project for 75,000 Reichsmarks, relocating development to the Horch plant at Zwickau. The resulting racing cars, Types A through D, were unusual for their era in placing the engine behind the driver in a rear mid-engine configuration, with the fuel tank positioned centrally so that weight distribution remained consistent as fuel was consumed — the same layout later adopted by modern open-wheel racing cars for identical reasons. The engines were supercharged and eventually produced almost 550 hp. Drivers noted challenging handling due to the rear weight bias, but the cars' power and acceleration were formidable: wheelspin could be induced at over 100 mph.
Hans Stuck won the German, Swiss, and Czechoslovak Grands Prix for Auto Union in the inaugural 1934 season. From 1935 to 1937, Auto Union cars won 25 races. Bernd Rosemeyer emerged as the team's most celebrated driver, winning the Eifelrennen and the German, Swiss, and Italian Grands Prix in 1936 en route to the European Championship — Auto Union's sole drivers' title. Rosemeyer was killed early in 1938 during an attempt on the land speed record on a German autobahn. Tazio Nuvolari joined for 1938 and won the Italian and Donington Grands Prix. In 1939, Nuvolari won the Yugoslav Grand Prix in Belgrade while Hermann Muller won the French Grand Prix. Auto Union also set land speed records; Stuck reached 199 mph on an Italian autostrada in a closed-cockpit streamliner.
Auto Union became a significant military supplier during the war, producing vehicles including the Sd.Kfz. 222 armoured car on a Horch chassis. The Saxon factories at Zwickau, Siegmar, and the Mitteldeutsche Motorenwerke subsidiary were heavily bombed from early 1944. US forces occupied Zwickau on 17 April 1945. When US forces withdrew, the Red Army took control and subsequently dismantled the factories as war reparations; racing cars found in storage were taken to Moscow for reverse engineering. On 17 August 1948, Auto Union AG was deleted from the commercial register. The company later commissioned a report on its wartime use of forced labour at the Leitmeritz concentration camp; the 2014 report found the company bore moral responsibility for the 4,500 deaths that occurred there.
Auto Union executives fled to West Germany before the Red Army's advance and established a new company in Ingolstadt, Bavaria, with Bavarian state loans and Marshall Plan aid. The reformed Auto Union GmbH was launched on 3 September 1949. With luxury brands Audi and Horch dormant, only the affordable DKW brand was viable for West Germany's rebuilding economy. DKW front-wheel-drive vehicles with two-stroke engines were produced, beginning with the DKW Meisterklasse F 89 P in 1950. Daimler-Benz acquired 87 percent of Auto Union in April 1958, investing heavily in the Ingolstadt plant, before selling shares to Volkswagen in the early 1960s. Volkswagen acquired the factory and trademark rights in 1964 and relaunched the Audi brand. In 1969, Auto Union merged with NSU Motorenwerke AG, and the combined entity was eventually simplified to Audi AG in 1985, ending the Auto Union name as an operating brand. Auto Union GmbH survives today as a wholly owned subsidiary of Audi AG managing the historical trademarks.
Gallery · 4 related images
