We all know Audi as one of the biggest car brands on the market, and part of Germany’s big three companies but how much do you really know about the company’s history?

Today we’re going to take a look at how Audi came into being, the origins of its name and how the company became the motoring giant it is today.

August Horch and the Audi Name

August Horch was born in 1868 in Rhenish Prussia where he developed a keen interest in engineering and vehicles from a young age. Originally, he trained as a blacksmith, but he soon returned to college at the Technical Academy in Mittweide, Saxony, where he received an engineering degree.

Following his graduation August went on to work in ship building before being employed at the Carl Benz company, which was one of Mercedes-Benz’s founding father’s previous companies.  Whilst with the business August was first an engine constructor and then progressed within the ranks to the head of motor vehicle production.

Although he worked for a successful motor company for several years August wanted to establish his own business and so he stepped away from his job at the Carl Benz company and in 1899 the A.Horch & Cie came into being. The company was established in Mannheim but then moved to Reichenbach in 1902 and the Zwickau just two years later where it was turned into a joint-stock corporation.

After a difference of opinions with the Board of Management and Supervisory Board August left the business he founded in 1909. But it wasn’t the motoring industry that August was leaving, just the company and so he soon founded another within a year. As his surname had already been trademarked with the A.Horch & Cie company August translated it into Latin, giving the name Audi to his new business Audiworke AG which later became Audi Automobilwerke GmbH when it became a joint-stock company in December 1914.

Both companies continued to be involved in the German automobile industry and later became part of the same Auto Union.

The Four Rings

On the 29th of June 1932 Audi joined forces with three other German car manufacturers in order to allow the brands to continue to grow whilst minimising the challenges that the first world war had caused them. The companies covered a wide range of the automotive sector with the vehicles they produced; Audi’s products were in the deluxe midsize segment, Horch were luxury cars, Wanderer covered midsize cars and DKW produced motorcycles and small cars.

The merger was at the initiative of the State Bank of Saxony and whilst it was taking place Audi was also negotiating a purchasing and leasing agreement with Wanderer for the takeover of its motor division.

Following the merger of the four manufacturers the company’s head offices were relocated to Chemnitz and it was the second-largest manufacturer in Germany at the time. The unification of the companies was highlighted in their new logo, which remains on all new Audis to this day - four interlocking rings.

The Four Companies

Before we go on to explore the advance of Audi and its journey into the titan it is today we wanted to take a look at the other companies who made up the Auto Union AG.

Wanderer Werke AG

Wanderer Werke AG was already based in Chemnitz and had a diverse mix of vehicles before it became a part of Auto Union AG, producing bicycles from 1885, machine tools from 1898 motorcycles from 1902, office machines from 1904, and cars from 1913. This diverse range of products meant that unlike the other companies who had the share of their capital purchased by the parent company Zschopauer Motorenwerke AG it was only the automobile division of Wanderer Werke AG that was acquired by a purchasing and leasing agreement. This allowed the bicycles, small motorcycles, office machinery and machine tools to remain divisions in a separate independent company. 

As mentioned above Wanderer produced vehicles for the mid-size market for drivers who were looking for a comfortable family vehicle but not something that was too large to manage or expensive to purchase and maintain. Other manufacturers who had strong models in this segment included Opel, Daimler-Benz (LINK) and BMW.

When the companies first came together Wanderer was the second largest at the time in terms of volume of vehicles they produced and the turnover they provided.

Initially the Wanderer brand was seen as the more practical range within the Auto Union but this changed in 1936 with the introduction of the Wanderer W 51 and Wanderer W 25 K sports car that had a supercharged engine and the first new restyled Auto Union body styling. The aim of this new styling and engines was to give the Wanderer brand a sportier and more progressive image, and aspects of it were also taken on board by other brands in the Auto Union.

However, when World War Two broke out in 1939 the development of the Wanderer brand was put on hold and following the war there was no attempt to revive it.


Also known as Zschopauer Motorenwerke, DKW was chosen to become the parent company of the Auto Union group when the four companies merged, for legal reasons.

Between 1932 and 1936 when they relocated to Chemnitz the Auto Union AG headquarters were located in the DKW head office building in Zschopau.

Though the company was critical for the success of the Auto Union AG for legal reasons they were equally as important for their products, with their small two-stroke engine cars and motorcycles serving the lower end of the market. In fact, these products were so important that in 1937 Auto Union with its DKW plant became the world’s largest manufacturer of motorcycles with 55,470 models produced that year.

Another area of production where the DKW brand helped the Auto Union maintain economic stability and growth was with their production of stationary engines. These had an incredibly diverse range of uses in different areas of industry, including agriculture, road construction, the fire bridge, the army and public authorities.

The DWK products were known to be simple, practical, reliable and economical for all users and so were very popular and helped maintain the financial stability of the Auto Union whilst their innovative approach to technology and their pioneering approach to the two-stroke engines, front-wheel drives and body materials helped bring an invigorated approach to the company.

During the late 1930s the brand was able to challenge the near instant success of the Volkswagen brand, and was really one of the only competitors for VW at the time.

After the Second World War the proven and popular products of the DKW brand allowed the newly founded Auto Union GmbH to gain a foothold in West Germany and to push forward the automobile industry in East Germany.


We’ve already established that the Horch Werke was founded by the same man as Audi, and although he had left the business the company never departed from the principle he had laid down – to only build good, powerful cards. From the very stary Horch motor vehicles were among the leading products of the industry in Germany.

During the 1920s as the country struggled to rebuild following the first world war Horch introduced extensive rationing measures to be able to make the most of the materials they were able to source as well as to ensure the assembly-line was as cost effective as possible.

Horch introduced Germany’s first eight-cylinder car in the autumn of 1926, which was one of the reasons they rose in popularity and became one of the leading German automobile manufacturers.  Prior to 1926 the company had focused on producing four-cylinder engines but following the introduction of the eight-cylinder they focused on the producing larger, more distinguished eight-cylinder models.

The Horch 8 was the epitome of elegance, luxury and cutting edge technology in the German market and gradually internationally as well.

Within the Auto Union it was obvious that the Horch would be the brand that occupied the luxury market within the union.

The Horch body design office also became the central design studio for all four brands and was responsibly for laying down stylistic principles, and the modern production technology used in the Horch factory became the standard for across the entire collaboration.

Following the merger, the Horch production programme was divided into two, with large cars that had straight eight engines and smaller models with V8 engines. The amount of luxury equipment that Horch cars could be kitted out with meant that they needed powerful engines to still provide the performance the brand was known for.

During the war Horch no longer developed any of the new models they were rumoured to have in the works prior to this and so only a few exhibition cars and prototypes for testing were ever built.


As we’ve mentioned a couple of times the market placement of each of the Auto Union’s brands is one of the reasons for its success. The Audi brand’s place was the midsize car market.

Under the Auto Union Audi’s principle feature became the front-wheel drive that they adapted from DKW’s existing models but for midsize vehicles.

The Front Type UW was a Type U with a Wanderer engine and went into production in the spring of 1933. Shortly after that the Audi Front 225 was unveiled at the 1935 Berlin Motor show and showcased the collaborative nature of the Auto union with an uprated 2.3 litre Wanderer engine powering it.

The 225’s successor was the Audi 920 which utilised a modular construction system, conventional rear-wheel drive and modern styling that made it an instant success. With it the Auto Union continued the collaborative approach between brands, and it had an inline six-cylinder OHC engine which had been developed by Horch and rear suspension using DKW’s floating-axle principle.

The outbreak of the Second World War brought the success of the 920 to an abrupt end as production of civilian vehicles ceased and the group’s operations switched to the production of armaments.

Audi During and After the War  

During World War Two the Auto Union group switched to producing armaments and for long periods there were forced labourers, prisoners of war and concentration camps that worked there.

In 1945 when the war ended the main premises of Auto Union AG was in the Soviet controlled section of the country and in 1948 the Soviet army expropriated Auto Union’s assets, dismantled their plant and removed them from the Commercial Register of the city of Chemnitz.

Following this dementalization of the Auto Union AG a new company was established in Inglostadt called Auto Union GmbH the next year. This was an independent manufacturing company that was no longer associated with the previous company though a lot of the same people were involved.

Later in 1949, they began to work on production of delivery vans and motorcycles for consumers, which were in demand vehicles following the war. These vehicles and those that followed in the early stages of the new company continued to produce the DKW two-stroke engines under the four ring brand.  

It was in the summer of 1950 that production on a new passenger car started and with it came the new wave of Audi passenger focused vehicles.

Audi and Daimler-Benz AG

During the mid 1950s Friedrich Flick bought up a large stake in the company with the aim of finding a strong partner which he did in 1958 with Daimler-Benz AG who purchased 88% of the company’s shares. The next year the Audi brand became a fully-owned subsidiary of Daimler-Benz AG.

It was while a part of Daimler-Benz that engineer Ludwig Kraus joined Audi as their Technical Director. Ludwig went on to adapt a four-cylinder, four-stroke engine to launch the new DKW F 102 passenger car in 1963. It was the first four-stroke engine from the company after the war and with it came a new era of Audi vehicles so popular that the model line remained in production for until 1972.

Audi and VW

In 1964 VW bought a 50% stake in the Audi company making them a primary stakeholder and decision maker for the brand. They were hesitant at first for the Auto Union (Audi) to create their own models but under Ludwig a new secret project was completed and a new car created. This car was the Audi 100, the first vehicle to deter from its DKW predecessors and have a completely new look. The Audi 100 marked the start of a new era for the brand.

Modern Audi  

Since the success of the Audi 100 Audi have continued to be at the forefront of innovative tech design and have produced a number of renowned models like the Audi Quattro, Audi TT and the favourite hatchback A1

They are one of the companies who are pushing to sustainably move towards EVs that maintain their brand’s ethos. The e-tron perfectly captured the sense of luxury and high quality finish that Audi are known for without compromising on performance or power.


Enjoyed this article? Read more of our latest blogs below:

Want to know more about car leasing?

For all our latest news and blogs click HERE.

Looking for the next best car leasing deal? Check out our Top Leasing Deals.

Or do you need to know more about leasing? Check out our Guide Pages.

Leave a Comment

Enter the text you see in the image in the form field above.
If you cannot read the text, refresh the page.
* required fields

Peace of Mind

Check out one of our helpful guides or our explaination of leasing to get all your questions answered.

View our FAQsGuides

Latest News

Get the latest news and blog posts from us.

View all News

Your Guide To Car Leasing

You can unsubscribe at any time

Lease Plan