Audi

• 1. Introduction

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  Audi began with a boy doing Latin homework in the corner of a crowded room. The room was the apartment of Franz Fikentscher. August Horch had called a meeting there with his close business friends, Paul and Franz Fikentscher, to find a name for a new car company. Franz's son kept glancing up as if he wanted to speak, then bit back his words and returned to his studies. At last he blurted out a question. "Father - audiatur et altera pars... wouldn't it be a good idea to call it audi instead of horch?" he said. The pun worked because horch is German for 'hark' or 'hear'. Audi is the singular imperative of the Latin audire, 'to listen'. Everyone in the room accepted the idea with enthusiasm.

  Today Audi AG is a German luxury carmaker headquartered in Ingolstadt, Bavaria. It is a wholly owned subsidiary of the Volkswagen Group and a sister to Porsche AG, which Volkswagen acquired outright in 2012. Along with BMW and Mercedes-Benz, it ranks among the best-selling luxury automobile brands in the world.

  The path to that position was strange. Why did a founder need a brand-new name for his car company in the first place? What do the four rings on the badge stand for? How did the name Audi disappear from the new car market, and how did a secret prototype bring it back? And what happened when a television news report and, decades later, a software scandal struck the company?

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• 2. From Horch to Four Rings

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  August Horch, who lived from 1868 to 1951, set up his first firm on the 14th of November 1899. It was called A. Horch & Cie. and operated in the Ehrenfeld district of Cologne. In 1902 he moved the company to Reichenbach im Vogtland. On the 10th of May 1904 he founded a joint-stock company in Zwickau, in the State of Saxony, named August Horch & Cie. Motorwagenwerke AG.

  Trouble with the chief financial officer of that firm pushed Horch out. On the 16th of July 1909 he founded a second company in Zwickau, the August Horch Automobilwerke GmbH. His former partners sued him for trademark infringement. The Reichsgericht, Germany's Supreme Court in Leipzig, eventually ruled that the Horch brand belonged to the old company. That verdict barred him from using his own surname on his new cars.

  The 25th of April 1910 is the date Audi Automobilwerke GmbH Zwickau entered the register of the Zwickau registration court. From 1915 it operated as Audiwerke AG Zwickau. The first car, the Audi Type A 10/22 hp Sport-Phaeton, appeared in that same year, and the Type B 10/28PS followed within the year. The Type A used a 2,612 cc straight-four engine. Larger models carried 3,564 cc, 4,680 cc and 5,720 cc engines, and these cars did well even in sporting events.

  Horch himself stepped away in 1920 for a senior post at the ministry of transport. He stayed involved as a member of the board of trustees. In September 1921 the Audi Type K made Audi the first German manufacturer to present a production car with left-handed drive. The layout spread through the 1920s. It gave drivers a better view of oncoming traffic, which made overtaking safer on roads where traffic keeps right. The first six-cylinder Audi, the 4,655 cc Type M, appeared in 1924.

  In August 1928 Jørgen Rasmussen, owner of Dampf-Kraft-Wagen, known as DKW, bought a majority of the shares in Audiwerke AG. That year he also bought what remained of the American maker Rickenbacker, including its equipment for building 8-cylinder engines. Those engines powered Audi Zwickau and Audi Dresden models launched in 1929. Six-cylinder cars and a four-cylinder model with a Peugeot engine were built alongside them. Audis of that era were luxurious, with special bodywork.

  Wanderer had been established back in 1885. In 1932 it joined Audi, Horch and DKW to form Auto Union AG, based in Chemnitz. During this period Audi offered the Audi Front, the first European car to pair a six-cylinder engine with front-wheel drive. It borrowed the Wanderer power train, rotated 180 degrees so that the drive shaft pointed to the front. Some Audi models also ran on engines built by Horch or Wanderer.

  Four interlinked rings, the badge Audi wears today, stand for those four companies, one ring for each. Before the Second World War, however, only Auto Union racing cars carried the badge. The member companies kept their own names and emblems on their road cars.

  By 1938 the DKW brand held 17.9% of the German car market, while Audi held only 0.1%. Economic pressure had pushed Auto Union toward smaller cars all through the 1930s. After the last few Audis were delivered in 1939, the name vanished from the new car market.

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• 3. War and Division

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  In 2014 Audi became the last major German car company, after Volkswagen, BMW and Daimler, to commission a study of its wartime activities. The findings were grim. Working with the SS, the company built seven labor camps, where more than 3,700 prisoners were put to work for Auto Union. A further 16,500 people were forced to work at its factories in Zwickau and Chemnitz. Another 18,000 labored at an underground plant in Bavaria, where 4,500 people died. The Allies bombed some of the factories.

  Richard Bruhn, a Nazi party member, chaired Auto Union's board from 1932 to 1945. He took the chair again after the war, when the company was reestablished.

  On the 17th of August 1948, Auto Union AG of Chemnitz was struck from the commercial register, which effectively liquidated the original company. Soviet control of East Germany had already left executives with no prospect of continuing production there. They began moving what remained to West Germany. In late 1945 they chose Ingolstadt, Bavaria, as the site for a spare parts operation.

  What stayed behind in Zwickau became VEB Automobilwerk Zwickau, or AWZ, where VEB stands for "People Owned Enterprise". In 1949 the former Audi factory there restarted assembly of prewar DKW models, renamed IFA F8 and IFA F9. They resembled the West German versions, and both used DKW's renowned two-stroke engines. The plant later built the infamous Trabant until 1991, after Volkswagen acquired it following German reunification. In 2021 the Audi Q4 e-tron went into production at Zwickau, the first Audi built there in over 80 years.

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• 4. Volkswagen Revives Audi

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  On the 3rd of September 1949, a new West German Auto Union was launched in Ingolstadt. Loans from the Bavarian state government and Marshall Plan aid paid for it. The company carried on the DKW tradition of front-wheel drive and two-stroke engines. Its first products included the 125 cc DKW RT 125 W motorcycle and the DKW F89 L delivery van.

  The Ingolstadt site was a large complex of former military buildings, well suited to administration, warehousing and distribution. It had no plant able to mass-produce cars. For its first postwar mass-market passenger car, the company rented capacity in Düsseldorf from Rheinmetall-Borsig. Only about ten years later, once an investor arrived, did money appear for a major car plant at Ingolstadt.

  In 1958, under pressure from Friedrich Flick, then the largest single shareholder, Daimler-Benz took an 87% holding in Auto Union. It raised that to 100% in 1959. Small two-stroke cars were not what Daimler-Benz cared about, and the aging range missed the early-1960s boom that benefited Volkswagen and Opel. Lack of profitability drove the decision to sell. Ironically, the business it sold included a large new factory and a nearly production-ready modern four-stroke engine.

  In 1964 Volkswagen bought a 50% holding. It came with the new Ingolstadt factory, the DKW and Audi brands, and rights to the Daimler-funded engine design. Daimler-Benz kept the dormant Horch trademark and the Düsseldorf factory, which became a Mercedes-Benz van assembly plant. Eighteen months later Volkswagen took complete control. By 1966 it was using spare Ingolstadt capacity to assemble an extra 60,000 Beetles per year.

  In September 1965 the DKW F102 received a four-stroke engine and a facelift at both ends. Customers were turning to smoother four-strokes, and Volkswagen dropped the DKW name because of its two-stroke associations. Internally the car became the F103, but it was sold simply as the "Audi". Later developments were named for their horsepower ratings, as the Audi 60, 75, 80 and Super 90, and sold until 1972. The Audi name had returned after a 25-year gap.

  Volkswagen had bought the company mainly for the Ingolstadt assembly capacity. At first it was hostile to the idea of Auto Union making its own models. Executives ordered the Auto Union name and the flags bearing the four rings removed from the factory buildings. Heinz Nordhoff, then the Volkswagen chief, explicitly forbade any further product development.

  Fearing that Volkswagen had no long-term ambition for Audi, engineers under Ludwig Kraus developed the first Audi 100 in secret, without Nordhoff's knowledge. Shown a finished prototype, Nordhoff was so impressed that he authorised it for production. Launched in 1968, the Audi 100 was a huge success.

  The first Audi 80 of 1972 became the template for Volkswagen's new front-wheel-drive, water-cooled range from the mid-1970s onward. It also formed the basis for the 1973 Passat. In 1974 came the Audi 50, later rebadged as the Volkswagen Polo. It was the first incarnation of the Golf and Polo concept, which grew into a hugely successful world car.

  On the 1st of January 1969, the merged Audi NSU Auto Union AG was incorporated, with its headquarters at the NSU plant in Neckarsulm. In the 1950s NSU had been the world's largest manufacturer of motorcycles. It then moved on to small cars such as the Prinz, and to rotary engines based on ideas of Felix Wankel. The 1967 NSU Ro 80 was far ahead of its time in aerodynamics, light weight and safety. Teething problems with the rotary engines ended NSU's independence. The Prinz models were dropped in 1973, and the Ro 80 went out of production in 1977.

  By the arrival of the second-generation Audi 100, the C2 of 1976, all production had moved from Ingolstadt to Neckarsulm. That plant has built Audi's higher-end models ever since. In 1985, with the Auto Union and NSU brands effectively dead, the official name was shortened to Audi AG. The headquarters moved back to Ingolstadt. Two new wholly owned subsidiaries, Auto Union GmbH and NSU GmbH, took over the trademarks of the old companies. The United States, where Volkswagen had introduced the Audi brand for the 1970 model year, would soon become the setting for a long crisis.

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• 5. Quattro and Rallying

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  Chassis engineer Jörg Bensinger had a proposal for a company whose image was conservative. He suggested taking the four-wheel drive technology from Volkswagen's Iltis military vehicle and using it in an Audi performance car and a rally car. The idea was accepted. The result, introduced in 1980, was the Audi Quattro, a turbocharged coupé. It was the first large-scale German production vehicle with permanent all-wheel drive through a centre differential.

  Fans call it the Ur-Quattro, because the German prefix Ur- means 'original'. Few were built, and a single team assembled all of them by hand. Yet the car was a great success in rallying. Its prominent wins proved that all-wheel-drive racecars could work, and the Audi name became linked with advances in automotive technology.

  Critics had doubted the viability of four-wheel drive racers, thinking them too heavy and too complex. Rule changes had only recently allowed their use in competition. The Quattro led its first rally before sliding off the road, but the rally world had been served notice. Hannu Mikkola won the drivers' title in 1983, and Stig Blomqvist won it in 1984. Audi took the manufacturers' title in 1982 and again in 1984.

  In 1984 the short-wheelbase Sport Quattro dominated the rallies in Monte Carlo and Sweden, with Audi taking every podium place. Problems followed deeper into the World Rally Championship season. In 1985 Walter Röhrl finished the season in his Sport Quattro S1 and helped place Audi second in the manufacturers' points. Audi also won rally honours that year in the Hong Kong to Beijing rally.

  Michèle Mouton was the only woman to win a round of the World Rally Championship. In 1985 she took the S1 to the Pikes Peak International Hill Climb. The race is a 1439 m climb to the summit of the 4302 m Pikes Peak in Colorado. She set a record of 11:25.39 and became the first woman to set a Pikes Peak record.

  In 1986 Audi formally left international rallying after an accident in Portugal. Joaquim Santos, driving a Ford RS200, swerved to avoid spectators in the road. He left the track into the crowd, killing three people and injuring 30. That same year Bobby Unser used an Audi to claim a new Pikes Peak record of 11:09.22. In 1987 Röhrl claimed the Pikes Peak title for Audi with a record of 10:47.85 in the S1.

  The S1 used Audi's time-tested turbocharged inline-five-cylinder engine, which produced 441 kW in its final version. It was paired with a six-speed gearbox and Audi's famous four-wheel drive. Mikkola, Blomqvist, Röhrl and Mouton all drove it. It began the line of Audi S cars, which now mark a step up in sports-performance equipment within the mainstream range. S and RS models have always had all-wheel drive. Their direct rivals from BMW M and Mercedes-AMG are rear-wheel drive only.

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• 6. Unintended Acceleration

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  Between 1982 and 1987, a series of recalls hit the Audi 5000 over reports of sudden unintended acceleration, linked to six deaths and 700 accidents. At the time, the National Highway Traffic Safety Administration, or NHTSA, was investigating 50 car models from 20 manufacturers for sudden surges of power.

  On the 23rd of November 1986, a 60 Minutes report aired interviews with six people who had sued Audi after reporting unintended acceleration. It showed an Audi 5000 apparently suffering a fault when the brake pedal was pushed. Later investigation revealed that the program had engineered the failure. A canister of compressed air sat on the passenger-side floor, linked by a hose to a hole drilled into the transmission.

  Audi argued, before outside investigators reached their findings, that the problems came from driver error, specifically pedal misapplication. NHTSA later concluded that most unintended acceleration cases were caused by driver error, such as confusion of pedals. That included all the cases behind the 60 Minutes report. CBS did not acknowledge the results of the government agencies, but it did acknowledge the similar results of another study.

  The story did not end there. In a review published in 2012, NHTSA pointed to "a failure in the idle-stabilizer system" that produced an initial acceleration of 0.3g. It added a second finding. "Pedal misapplication resulting from panic, confusion, or unfamiliarity with the Audi 5000 contributed to the severity of the incident," it wrote. Its technical analysis found that the idle-stabilization systems were prone to defects. They produced excessive idle speeds and brief accelerations of up to 0.3g, similar to an emergency stop in a subway car.

  Those surges could not be the sole cause of long-duration incidents, but they might have triggered some by startling the driver. Transport Canada also reported intermittent malfunctions of the electronic control unit. It remains unclear how the idle-stabilization defects were finally addressed.

  Audi's recall campaigns made several modifications. The first adjusted the distance between the brake and accelerator pedals on automatic-transmission models. Later repairs, covering 250,000 cars dating back to 1978, added a device requiring the driver to press the brake pedal before shifting out of park. The legacy of the 5000 and other reported cases is the intricate gear stick patterns and brake interlock mechanisms. They are meant to prevent inadvertent shifting into forward or reverse.

  Audi's United States sales fell from 74,061 in 1985 to 12,283 in 1991 and stayed level for three years, while resale values dropped dramatically. Audi offered increased warranty protection and renamed the affected models, with the 5000 becoming the 100 and 200 in 1989. It reached the same sales levels again only by model year 2000.

  A 1987 class-action lawsuit was filed by about 7,500 owners of Audi 5000 models. A 2010 BusinessWeek article reported that it remained unsettled. It was still contested in Chicago's Cook County, after appeals at the Illinois state and United States federal levels.

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• 7. Aluminium and the Upmarket Push

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  In 1986 the Audi type 89 was introduced, a completely new design that sold extremely well. Its base package was spartan, and even the passenger-side mirror was an option. By the early 1990s sales of the Audi 80 series slumped, and Audi began shifting upscale to compete with Mercedes-Benz and BMW. The 1990 Audi V8 led that push. It was essentially a new engine in the Audi 100 and 200, with a new grille built into the bonnet.

  The Audi S2 and S4 arrived in the early 1990s and began the mass-produced S series of performance cars. In 1992 the all-new Audi 100 brought a 2.8 L V6 engine. In 1995 the Audi A4 replaced the Audi 80, and the Audi 100 became the A6. The Audi A3 hatchback followed in 1996, sharing a platform with the Volkswagen Golf Mk4. The radical Audi TT debuted in 1998.

  Audi's slogan, Vorsprung durch Technik, means 'Progress through Technology', and the mid-1990s gave it substance. In 1994 the Audi A8 launched with the Audi Space Frame, an aluminium structure. It saves weight and improves torsional rigidity compared with a conventional steel frame. Audi had earlier tested the technique on aluminium versions of the Type 44 chassis. The drawback is cost, because the frame is very expensive to repair and needs a specialized aluminium bodyshop. Even so, the A8 is usually the lightest all-wheel-drive car in the full-size luxury segment, with best-in-class fuel economy.

  The Audi A2, built from 1999 to 2005, was a futuristic super mini born from the Al2 concept. It used an aluminium space frame and frugal three-cylinder TDI engines, and its design was shaped around a wind tunnel. The A2 was criticised for its high price and was never really a sales success. Still, it planted Audi as a cutting-edge manufacturer. Audi discontinued it in 2005 and chose not to develop an immediate replacement.

  Audi also became the first mass-market maker to galvanise every body, following a process introduced by Porsche around 1975. The full-body zinc coating proved so effective against rust that Audi extended its original 10-year warranty against corrosion perforation to 12 years.

  Under the bonnet, the Audi A8L W12 uses a Volkswagen Group W12 engine instead of the V12 favored by rivals Mercedes-Benz and BMW. Its narrow cylinder banks make it compact enough to fit all-wheel drive, which a conventional V12 could not allow. The 6.0 L W12 is actually smaller overall than the 4.2 L V8 in other A8 models. For most of its range, Audi avoids the transverse engine layout, which would limit the engines it can install. It favors a longitudinal front-mounted engine instead. In the United States most of its expensive models carry all-wheel drive as standard.

  In 2005 Audi began fitting white LED daytime running lights. They debuted on the Audi A8 W12, the world's first production car with LED daytime running lights. Their distinctive shape became a trademark of sorts.

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• 8. Diesel Glory and Scandal

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  Audi began racing prototype sportscars at Le Mans in 1999 with two concepts. One was the open-cockpit Audi R8R and the other the closed-cockpit Audi R8C. The R8R scored a credible podium on its debut and was the design Audi developed into 2000. Most rivals, such as BMW, Toyota, Mercedes and Nissan, retired from the sport at the end of 1999.

  The factory-supported Joest Racing team won at Le Mans three times in a row with the Audi R8, from 2000 to 2002. In the American Le Mans Series, factory R8s took 25 victories between 2000 and the end of 2002. At the 2004 race the top three finishers all drove R8s. In 2005 Champion Racing took first place, making it the first American team to win Le Mans since the Gulf Ford GTs in 1967.

  The replacement, the Audi R10 TDI, was unveiled on the 13th of December 2005. Its most notable feature was a twin-turbocharged direct injection diesel engine, and Le Mans regulations favored diesel. It won the 2006 24 Hours of Le Mans. Peugeot's 908 HDi FAP became Audi's main rival, and Peugeot won the race in 2009.

  In 2011 the Audi R18 won Le Mans by a margin of 13.8 seconds. Benoît Tréluyer earned Audi its first pole position in five years, and the sister car locked out the front row. Early accidents eliminated two of Audi's three entries. The surviving R18 TDI of Tréluyer, Marcel Fässler and André Lotterer then held off a trio of Peugeot 908s.

  Audi won the first World Endurance Championship race at Sebring in 2012, and went on to take the inaugural manufacturers' title. In 2013 it won the first five races. The victory at the Circuit of the Americas was Audi's 100th win in Le Mans prototypes. In 2014 Porsche returned to endurance racing after a 16-year absence. At Silverstone both Audis retired, the first time an Audi had failed to score a podium in a World Endurance Championship race. Audi finished second in the manufacturers' standings in 2014-2015 and 2016. It left the championship after 2016.

  In 2015 Audi admitted that at least 2.1 million Audi cars were involved in the Volkswagen emissions testing scandal. Software in the cars manipulated emissions data to fool regulators, letting the cars pollute beyond the legal limits. Ulrich Hackenberg, the head of research and development at Audi, was suspended. In November 2015 the United States Environmental Protection Agency named 3-liter diesel versions of the 2016 A6 Quattro, A7 Quattro, A8, A8L and Q5. They emitted nitrogen oxide at up to nine times the legal limit when the car detected it was not connected to testing equipment.

  On the 18th of June 2018, Volkswagen announced that Audi chief executive Rupert Stadler had been arrested. Audi planned to cut 9,500 jobs in Germany from 2020 to 2025 to fund electric vehicles and digital working. In December 2018 it announced an investment of 14 billion Euro ($15.9 billion) in e-mobility and self-driving cars. On the 16th of November 2020, Audi became a wholly owned subsidiary of the Volkswagen Group. In March 2026 the company announced that an Audi A2 e-tron would go on sale in 2026. It is a small electric car that follows the shape of the original A2.

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