The Type C followed the established architecture of the Type A and Type B: supercharged V16 engine mounted behind the driver, mid-engined layout with the fuel tank at the center, and the radical front-to-rear arrangement of radiator, driver, fuel tank, engine. Like its predecessors, it was built at the Horch works in Zwickau under the engineering oversight of Ferdinand Porsche's team.
For 1936 the engine was expanded to the full six litres permitted under the 750 kg formula, producing 520 bhp (390 kW) — a figure that resulted in wheelspin being achievable even at speeds above 100 mph. The combination of extreme power and the rear-heavy weight distribution created oversteer characteristics that tested even the most skilled drivers. The Porsche-developed ZF limited slip differential, introduced at the end of 1935, helped manage the power under corner exit, but the Type C remained a car that demanded great physical and mental commitment.
The Type C was also used in streamlined body configurations for land speed record attempts and high-speed circuits. In its streamlined form, the car reached 380 km/h (236 mph) in the hands of Rosemeyer at the AVUS in May 1937.
The 1936 season was Auto Union's most dominant. Bernd Rosemeyer drove the Type C to victories at the Eifelrennen, German Grand Prix, Swiss Grand Prix, Italian Grand Prix, and Coppa Acerbo, and he was crowned European Champion — Auto Union's one and only drivers' championship title. He also took the European Mountain Championship, completing a remarkable double.
Achille Varzi won the Tripoli Grand Prix and placed second at Monaco, Milan, and the Swiss Grand Prix. Hans Stuck placed second at Tripoli and the German Grand Prix, and Ernst von Delius took second at the Coppa Acerbo. The breadth of the podium results confirmed that the Type C's performance advantage extended across multiple driver capabilities.
Mercedes-Benz struggled against the Type C's power that year and ultimately withdrew from several rounds to focus development on a new car. Only Caracciola could score wins for Mercedes, including a victory in the wet 1936 Monaco Grand Prix where the power disadvantage mattered less.
In 1937 Auto Union continued with a largely unchanged Type C, facing the new and more sophisticated Mercedes-Benz W125. Despite being nominally outclassed by the new W125's superior handling, the Type C performed better than expected, winning five races to the W125's seven.
Rosemeyer took the Eifelrennen, Donington Grand Prix, Coppa Acerbo, and Vanderbilt Cup in the United States. Rudolf Hasse won the Belgian Grand Prix, with Stuck second. Ernst von Delius placed second at the Avus Grand Prix. The 1937 season thus produced a competitive points battle even as the W125 demonstrated a technical edge at many circuits.
The Type C in streamlined configuration also contested outright speed records on German autobahns. In January 1938, during a speed record attempt on the Frankfurt–Darmstadt autobahn, Bernd Rosemeyer was killed when his car was struck by a crosswind gust at high speed. His death robbed Auto Union of its most gifted driver at the very moment the team was transitioning to the Type D.
One original Type C is known to survive. Left to a German museum by Auto Union following Rosemeyer's death, the car suffered bomb damage during World War II and still bears the visible effects. It was preserved by Audi in a conservation-level overhaul in 1979–1980. A separate car that had been taken to Moscow eventually made its way to the Riga Motor Museum in Latvia following intervention by Viktors Kulbergs. After the collapse of the Soviet Union, Audi engineers identified this car as a C/D hillclimb hybrid and repatriated it in exchange for a replica. Both the original and the replica are used for demonstration appearances.
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