Mobility for the people — The founding of Volkswagen 80 years ago

(May 29, 2017) WOLFSBURG — Eighty years ago marked the beginning of one of the most successful automobile producers in the world. On May 28, 1937, the predecessor to today's Volkswagen Group, "Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH" ("Corporation to prepare the way for the German People's Car") was established in Berlin. 

A company, whose history began with the production of the Beetle, has developed over the past 80 years into a global player with 12 brands, 120 production sites on four continents, more than 620,000 employees and more than 10 million vehicles sold per year.

Since the beginning of the 20th century, the dream of affordable driving for all social classes has fascinated people and engineers. The National Socialist regime exploited this popular idea for their own interests, and in 1934 the "Reichsverband der Automobilindustrie" ("Reich Automotive Industry Association") commissioned Ferdinand Porsche to handle the engineering design of a "German people's car."

Together with his team, Ferdinand Porsche developed a vehicle that was ready for production in 1938 and has been democratizing mobility for decades since the end of the Second World War. The Beetle laid the foundation for the Volkswagen Group and was the most successful car of its time with more than 21.5 million vehicles produced.

The first production Volkswagen in 1938

In May 1938, work began to construct a plant on the Mittelland canal in today's Wolfsburg to produce the Volkswagen Type 1, which was known as the "KdF-Wagen" at that time. The production of the "KdF-Wagen" however remained propaganda with only 630 vehicles produced at the Wolfsburg plant up to 1945. Instead, armaments were produced for the Second World War including military utility vehicles (known as "Kübelwagen") and amphibious vehicles.

After the end of the war, the British took over the responsibility of the plant and the city and set the course for Volkswagen's success. They actively committed to the reconstruction, and in December 1945 started producing the Type 1 with 55 vehicles, which was soon to be affectionately called the "Beetle." They also laid the foundation for Volkswagen's global market focus: Export abroad began as early as 1947 with five vehicles to the Netherlands.

British administration effectively transformed Volkswagen into a civilian company that was able to make its start from pole position into a German economic miracle.  In October 1949, the British turned over trusteeship to the German Federal Government and the State of Lower Saxony was entrusted with its administration. The Volkswagen Beetle and Transporter decisively shaped Volkswagen's further expansion. High demand for both models led to the construction of additional factories: From 1956, the Transporter was produced in Hanover, gearboxes in Kassel, axles and tools in Braunschweig and the plant in Emden was constructed for overseas exports.

With these achievements, Volkswagen symbolically stood for the German economic miracle after the Second World War — and not only in Germany, but also abroad: In 1952, the first foreign sales company was established in Canada followed by the Brazilian subsidiary "Volkswagen do Brasil Ltda." in 1953. 1960 saw the privatization of the majority of the state-owned company, and Volkswagen was converted into a stock corporation (Aktiengesellschaft). At that time, the company already had 64,100 employees and produced 888,500 vehicles per year.

The first VW Beetle sold in the U.S. in January 1949

A further surge in growth occurred with the transition into a multi-brand group: In 1965, Volkswagen acquired Auto Union GmbH, which merged with NSU Motorenwerke Aktiengesellschaft in 1969 to form today's Audi AG.

Additional brands followed from the mid-1980's: SEAT (1986), SKODA (1991), Bentley (1998), Bugatti (1998), Lamborghini (1998), Porsche (2009), MAN (2011), Ducati (2012) and Scania (2015). Volkswagen Financial Services AG consolidates all financial services successfully under one roof. And, with the newly launched company MOIA, the Group is now also active in the future-oriented field of mobility services.

A groundbreaking technological milestone in Volkswagen's history and the onset of a new, successful era was the switch from air-cooled to water-cooled engines and from rear to front-wheel drive between 1973 and 1975. The models Passat, Scirocco, Golf and Polo paved the way out of a crisis due to declining volume sales and the oil price shock in 1973. The Golf – after which an entire car category was to be named and of which more than 33 million have been sold up to today – rapidly advanced to being the successor to the Beetle as the classless vehicle for people with a diversity of needs.

Volkswagen has also become a global player today due to its early market entry in China, where, as early as 1985, the first Volkswagen was produced in collaboration with a Chinese partner. Today, the Volkswagen Group operates two joint ventures with Chinese partners – a third is soon to follow. In 2016, the Group sold around four million vehicles in China.

After years of continuous growth, the diesel crisis and new challenges in the markets necessitate a realignment of the Volkswagen Group. With its "TOGETHER – Strategy 2025," the company is resolutely driving its change from one of the biggest carmakers to a leading provider of sustainable mobility. Digitalization, e-mobility, autonomous driving and new mobility services play a significant role in achieving this.

Given a history of over 80 years under the belt, the Volkswagen Group is approaching the future optimistically. Once again, it will be essential to demonstrate an innovative spirit and willingness to change, which will enable the company to write another successful chapter in its history.