Volkswagen was founded in Berlin on 28 May 1937 as the Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH, created by the National Socialist Deutsche Arbeitsfront to manufacture the car designed by Ferdinand Porsche's consulting firm — the vehicle that would become the Beetle. The company was backed by Adolf Hitler, renamed Volkswagenwerk GmbH in September 1938, and centred on a new factory at Fallersleben, later named Wolfsburg. During World War II the plant primarily produced military Kübelwagen and Schwimmwagen vehicles, also manufactured V-1 flying bombs, and utilised slave labour — the company acknowledged in 1998 that around 15,000 forced workers had been used.
After the war, British Army officer Major Ivan Hirst took control of the bombed factory and restarted production for the British military. In 1948 the British government handed the company to the German state, to be managed by former Opel chief Heinrich Nordhoff, under whom output grew rapidly throughout the 1950s and 1960s.
On 1 January 1965, Volkswagenwerk acquired Auto Union GmbH from Daimler-Benz, and the new subsidiary subsequently produced the first post-war Audi models. NSU Motorenwerke AG was merged into Auto Union on 26 August 1969, forming Audi NSU Auto Union AG, later renamed AUDI AG in 1985. The company's name changed to Volkswagen Aktiengesellschaft on 4 July 1985 to reflect its increasing global scope.
Volkswagen launched a new generation of front-wheel-drive, water-cooled vehicles in the 1970s — the Passat, Polo, Scirocco, and Golf, all styled by Giorgetto Giugiaro. The Golf in particular became the company's most successful model after the Beetle. In 1986 Volkswagen acquired a 51 percent controlling stake in SEAT, making it the first non-German subsidiary of the group. Full ownership of Škoda was completed in 2000. In 1998, three prestige marques were added to the portfolio: Bentley, Lamborghini, and Bugatti. Scania was acquired in 2008, and Ducati, MAN, and Porsche in 2012.
The integration of Porsche followed a complex corporate saga. Porsche had begun accumulating Volkswagen shares from 2005, eventually holding over 74 percent of ordinary shares and options, briefly making Volkswagen the world's most valuable company as short sellers scrambled to cover positions in October 2008. However, Porsche's vast financial exposure left it unable to complete a full takeover, and on 1 August 2012 Volkswagen completed the purchase of full ownership of Porsche AG, making Porsche the group's tenth brand.
Audi Sport GmbH is Audi AG's performance engineering and manufacturing subsidiary, 100 percent owned within the group. Through Audi, the Volkswagen Group has a significant motorsport footprint covering touring car, sportscar, and rally competition. Porsche AG has extensive motorsport heritage including the Le Mans 24 Hours and the Nürburgring. Lamborghini competes in GT racing globally. SEAT's motorsport division was renamed Cupra Racing in 2018, with Cupra simultaneously launched as an independent performance brand.
The Volkswagen Group sells passenger cars under the Audi, Bentley, Cupra, Jetta, Lamborghini, Porsche, SEAT, Škoda, and Volkswagen brands. Ducati provides the motorcycle presence. Light commercial vehicles trade under Volkswagen Commercial Vehicles. Heavy commercial vehicles are managed through the listed subsidiary Traton, which encompasses International Motors, MAN, Scania, and Volkswagen Truck and Bus. Software and technology systems are developed under the CARIAD subsidiary. The group has approximately 100 production facilities across 27 countries and operations in around 150 nations. Three joint ventures operate in China — FAW-Volkswagen, SAIC Volkswagen, and Volkswagen Anhui — though Chinese sales declined significantly in the early 2020s.
On 18 September 2015, the US Environmental Protection Agency announced that Volkswagen had installed defeat device software in diesel models sold in the United States from 2009 to 2015. The code was designed to detect when an emissions test was being conducted and alter controls to improve compliance; off the test stand, actual NOx emissions ran 35 to 40 times regulatory levels. On 22 September 2015, Volkswagen admitted that 11 million cars worldwide had been fitted with the software. CEO Martin Winterkorn resigned on 23 September 2015. In April 2017 a US federal judge ordered Volkswagen to pay a $2.8 billion criminal fine. Total penalties and lawsuit settlements from the scandal exceeded $30 billion.
In its 2023 financial report, Volkswagen Group estimated its long, medium, and short-term debt at €155.6 billion. The company announced plans in October 2024 to close at least three German plants and cut jobs, citing delayed electric vehicle investments and a 64 percent drop in profit for the third quarter of 2024. Swedish battery supplier Northvolt, in which Volkswagen had invested €1.4 billion, filed for bankruptcy in November 2024.
Volkswagen's Strategy 2025, announced in 2016, centred on electrification across the brand portfolio. The group developed the MEB platform for electric vehicles and committed $48 billion to battery supply by 2022. By February 2024, Volkswagen and Chinese electric vehicle manufacturer XPeng had signed a technology cooperation and joint development agreement. The government of Lower Saxony holds 12.7 percent of the company's shares, granting it 20 percent of voting rights under German law.
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