In the 1930s four rings signified the creation of the first Auto Union, the amalgamation of the motor industry in Saxony. DKW, Horch, Wanderer and Audi joined up to weather financial storms following the Great Depression and face intervention from the emerging Third Reich. The State Bank of Saxony, the Allgemeine Deutsche Credit Anstalt (ADCA) and the Commerzbank of Berlin were midwives at the birth of the Auto Union.
DKW persevered with motorcycles, making a primitive car in 1928, then at the 1931 Berlin motor show made a breakthrough with the first front wheel drive production car three years ahead of Citroën. FWD was novel, it was cheap, and DKW was good at it. Innovation did not bring prosperity however, and DKW was obliged to take a shareholding in Audi, making Rasmussen chairman. But by 1932 car sales in Germany had halved and DKW suffered from Rasmussen's expansionism. To make things worse, the Hitler regime planned a state-sponsored car to go on sale to the German Volk at a seemingly impossible price to savers of political tokens.
DKW's contribution of share capital was Rm10 million, Horch brought Rm500,000, Audi Rm2,500,000, and Wanderer Rm15,730,000. The new combine had a staff of 4,500 and factories at Zschopau making motorcycles and 2-stroke engines, Zwickau (cars), Berlin-Spandau (wooden body frames) and Siegmar (cars and steel bodies). Auto Union was a major player in the German motor industry alongside Adler, BMW, Opel, Daimler-Benz, and Ford. Meanwhile the cause of all the angst, the Volkswagen, was slow making its appearance.
Hitler sanctioned the VW provided it could cruise the new autobahns at 100kph, obtain a fuel consumption of 7l/100 kms (40 mpg) and sell for Rm990. A contract was drawn up under which Rm200,000 was set aside for a prototype and a production run of 50,000. The effect on the established Saxony car makers was profound but in 1935 Volkswagen was inaugurated. State intervention had been inevitable and the Auto Union’s marques Horch, Audi, Wanderer and DKW were broadly complementary. Horch made premium big saloons and tourers, Audi was distinctly middle-class. Wanderer had a solid array of good family cars and DKW lively cheap two-stroke economy models.
Now Automotive News Europe reports: "The simple deal logic is straightforward," London-based analyst Arndt Ellinghorst of ISI Group wrote in a note to investors. "Chrysler - better Jeep and Dodge - could fix VW's US problems; Alfa could replace the ailing Seat brand; Fiat Europe is basically the 500 product family plus LCVs. Latin America could be sold, potentially to a Chinese buyer."
Top: Mid-engined masterpieces, Auto Union racing cars by Dr Porsche.
Audi adopted Auto Union’s four rings.
Number 1 surmounts the bonnet of an Audi Front.
Horch made some spectacular cars
DKW Sonderklasse. Front wheel drive, 2-stroke and one of my first ever test cars, borrowed from the factory in Düsseldorf in 1956. My first drive at the Nürburgring.
Workaday Wanderer W24 with Auto Union rings