The car brand that translates to “folk” or “people’s car” is today one of the world’s most recognized automotive manufacturers. From its controversial beginnings in 1933 to becoming a global powerhouse, let’s explore how Volkswagen was established and why this iconic concern produces far more than just the cars bearing its name.
The Origins of Volkswagen: A Vision for the People’s Car
The Weimar Republic Era and Early Concepts
The concept of a people’s car dominated discussions even during the Weimar Republic. However, the idea faced significant opposition:
- Many questioned whether Germany needed another car manufacturer
- Critics argued that motorcycles already served as the most democratic vehicle
- World War I and subsequent political disruptions delayed implementation
- The economic crisis further postponed the dream
Despite these challenges, the vision persisted. In 1930, at a Berlin automobile exhibition, a national car prototype was presented as an attraction, keeping the dream alive.
Hitler’s Directive and Ferdinand Porsche’s Mission
In 1933, the Nazis came to power with Hitler as chancellor. A pivotal meeting in autumn 1933 at Berlin’s Kaiserhof Hotel brought together:
- Adolf Hitler
- Jacob Werlin (Daimler-Benz Corporation representative)
- Ferdinand Porsche (automotive designer)
Hitler issued a demanding directive: create a strong, reliable car for German citizens costing no more than 1,000 Reichsmarks. The vehicle would be assembled in a new factory symbolizing the new Germany. After sketching his vision and outlining the program’s main points, Werlin proposed Ferdinand Porsche as the designer to execute this government order. Porsche accepted the challenge to transform the people’s car from dream to reality.
The Birth of the Beetle: Volkswagen’s First Models
The Iconic Beetle Design
The first German people’s car earned the nickname “Beetle” due to its distinctive, rounded shape. The development timeline was remarkably swift:
- January 17, 1934: Ferdinand Porsche submitted Beetle drawings to the Reich Chancellery
- June 1934: Contract signed between RDA (German Automobile Association) and Dr. Ing. h.c. F. Porsche GmbH
- Timeline: Only 10 months allocated for development
- Budget: 200,000 Reichsmarks
Technical Specifications and Requirements
The Beetle, based on the earlier Porsche Typ 60, had to meet strict criteria:
- Five-seat capacity
- Maximum price: 1,550 Reichsmarks
- Top speed: 100 km/h (62 mph)
- Fuel consumption: 8 liters per 100 km
- Engine power: 26 horsepower (first prototype)
Prototype Development and Testing
Two years of intensive work by designers and engineers produced three distinct versions:
- V1: Two-door sedan
- V2: Cabriolet model
- V3: Four-door variant
Testing proved successful—prototypes covered nearly 50,000 kilometers without revealing significant weaknesses. This success led to an order for 30 additional prototypes from the Daimler-Benz factory.
Factory Construction and Production
Key milestones in Volkswagen’s manufacturing infrastructure:
- 1936: First factory built in Ulm, southwestern Germany, along the Neckar River
- May 26, 1938: Foundation laid for Volkswagen factory near Fallersleben
- 1938: Construction began on workers’ town in Wolfsburg
Post-War Recovery and International Expansion
British Control and Initial Production
Following World War II, Volkswagen’s future hung in the balance:
- Factory fell under British control in their occupation zone
- Autumn 1945: British authorities ordered 20,000 cars
- Nearly ten years passed before mass production in original specification began
Export Success and Growing Reputation
1947: Volkswagen’s exhibition at the Hanover export fair attracted significant international attention, resulting in:
- First foreign order: 1,000 cars from Holland
- 1948 orders from Switzerland, Belgium, and Sweden
- Growing recognition in European markets
New Leadership and Modernization
January 1948 marked a turning point when Henrich Nordhoff became general director. The new leadership team brought:
- Graduate engineers with international experience
- Innovative thinking and modern approaches
- Accelerated modernization and vehicle improvements
The Golden Age: Volkswagen’s Market Dominance
Domestic Market Growth
As Germany’s economy recovered, automobile demand surged. June 30, 1949 saw the formation of Volkswagen-Finanzierungs-Gesellschaft GmbH to boost sales to German citizens.
New developments included:
- Two new models: limousine and cabriolet
- Enhanced cabin comfort
- Partially synchronized engines
- Expanding vehicle service network
Production Milestones
Volkswagen’s production numbers tell a remarkable growth story:
- 1948: 15,000 cars sold domestically, 50,000 for export
- September 1949: Factory fully transferred to Federal Republic of Germany (FRG)
- 1950: 100,000 cars produced
- 1951: Half a million cars manufactured
- 1955: One millionth VW produced in solemn ceremony
- 1972: Beetle becomes best-selling car worldwide
The popular German phrase “It is a member of my family” captured Volkswagen’s cultural significance during this era.
Corporate Expansion: Formation of VAG
1965: Volkswagen AG acquired Audi from Daimler-Benz, creating the Volkswagen-Audi Group (VAG). The conglomerate later expanded to include:
- Spanish manufacturer SEAT
- Czech factory Škoda
- Audi AG as a fully independent subsidiary
Innovation and New Model Development (1970s-1980s)
Front-Drive Revolution
1973: The front-drive VW Passat launched as the ancestor of VW’s new generation, available with engines ranging from 1,297cc to 1,588cc.
The Game-Changing Golf
1974 proved pivotal with multiple landmark releases:
- VW Scirocco: Sports three-door coupe with engines from 1,093cc to 1,588cc
- VW Golf: Compact three- and five-door hatchback combining comfort, dynamism, and lightness
The Golf’s impact was immediate and profound:
- Became German car market sales leader
- First 30 months: 1 million units produced
- Transformed Volkswagen AG into one of Europe’s largest manufacturers
- Beetle production stopped in Wolfsburg (continued in Brazil and Mexico)
Polo and Golf Evolution
1975: Volkswagen Polo launched as Golf’s simplified modification with 40-horsepower engine
1976: Polo sedan developed based on Audi 50
1979: VW Golf cabriolet introduced, achieving sustained high demand
Next-Generation Models
The Volkswagen Group’s renewal began in 1983 with successive model launches:
- Scirocco (new generation): 120-200 horsepower engines
- VW Golf II (1983): Continued Golf legacy
- VW Golf III (1991): Maintained high reputation
- Achievement: 17 million Golf cars produced across three generations in 23 years
- 1995-1996: Golf III led European sales
- VW Golf IV (1997): Latest generation debut
Sports Car Transitions
1988: Volkswagen Corrado introduced, replacing the Scirocco in the company’s lineup. Strong financial performance enabled strategic acquisitions, with Porsche coming under Volkswagen control (until 2007).
Premium Brand Acquisitions and Luxury Market Entry
1998: The Turning Point
1998 marked a watershed moment when three premium brands joined Volkswagen:
- Bentley: Positioned as luxury market leader
- Lamborghini: Transferred to Audi control in 1999 with enhanced technical capabilities
- Bugatti: Tasked with creating automotive history
Volkswagen’s control extended to Rolls-Royce production facilities, enabling production of what became known as “cars for millionaires.”
The Bugatti Veyron Achievement
In 2000, Bugatti engineers received an unprecedented challenge: create history’s most powerful and fastest car using all Audi’s latest developments.
2005: The Bugatti Veyron triumphantly entered Volkswagen’s history:
- 1,000 horsepower powerplant
- First-ever hypercar designation
- Multiple speed records established
SUV and Modern Vehicle Development (2000s-2010s)
Volkswagen Touareg: Racing Success
Since 2002, the Volkswagen Touareg has been produced at the Bratislava factory. As Volkswagen’s second SUV after the 181 “Kurierwagen,” the Touareg achieved remarkable racing victories:
- First place finishes: Paris-Dakar races 2009-2011
- Displaced more experienced competitors from leading positions
2006-2007 Model Expansion
2006: VW EOS coupe-cabriolet production began
2007 brought multiple releases:
- VW Tiguan crossover: Three configurations (Trend & Fun, Sport & Style, Track & Field)
- New generations: Touareg and Golf Variant
- Updated models: GolfPlus became CrossGolf; Touran became CrossTouran
Global Expansion and Modernization
By 2012, Volkswagen achieved comprehensive modernization:
- All vehicles in the Volkswagen concern modernized
- Sales markets reached 150 countries
- Active investment in China business development
Electric and Hybrid Vehicle Innovation
Volkswagen e-Golf (2013)
The 2013 Volkswagen e-Golf represented the most eco-friendly Golf version ever produced, featuring:
- Climate control with parking lot heating and cooling capability
- Multimedia system with integrated navigation
- Heated windshield
- LED headlights
Volkswagen Golf GTE
World premiere: Geneva Motor Show, March 2014
This front-drive C-class hatchback features a hybrid powerplant combining:
- 150-horsepower turbocharged 1.4-liter gasoline engine
- 102-horsepower electric motor
Volkswagen Jetta Hybrid (2015)
The 2015 restyled Jetta Hybrid C-class sedan incorporated:
- Optimized aerodynamics to offset increased mass from electric motor and batteries
- Enhanced hybrid component integration
- Improved efficiency and performance
Volkswagen Today: Global Leadership and Future Vision
Market Position and Financial Performance
The Volkswagen Group has become the world’s largest car manufacturer, surpassing Toyota. Current achievements include:
- Annual sales: 10 million cars
- Pre-tax profitability: 8%
- Market leadership: Displaced Toyota from first place
- Financial position: Exceptionally favorable
Investment and Expansion Plans
Volkswagen plans to invest approximately $80 billion in:
- 10 new factories (7 in China)
- Dozens of new products spanning SUVs to $9,000 emerging market vehicles
- Advanced technologies including:
- Removable hybrid engines
- Advanced infotainment systems
- Next-generation automotive innovations
Wolfsburg: The Volkswagen City
City Statistics and Infrastructure
Founded in 1938, Wolfsburg truly deserves its nickname “Volkswagen City”:
- Population: 123,000 residents
- Factory size: 6.8 square kilometers
- Employees: 50,000 workers
- Headquarters: Thirteen-story building
Volkswagen’s Cultural Impact
The company’s influence permeates every aspect of city life:
- Volkswagen-sponsored cultural festivals
- Volkswagen Arena (home to Wolfsburg football team)
- Ritz-Carlton hotel (owned by the concern)
Autostadt: The Ultimate Brand Experience
This $1.2 billion amusement park showcases Volkswagen’s ambitions:
- Annual visitors: 2.3 million
- Territory: 69 hectares
- ZeitHaus: World’s most popular car museum
- Interactive exhibits: Latest car design and technology innovations
- Customer experience: 25% of visitors collect new cars directly from factory
The Glass Towers: Engineering Marvel
Two 20-story glass towers dominate Wolfsburg’s landscape:
- Daily capacity: 500 cars removed by robotic lifts
- Purpose: Store vehicles awaiting customer delivery
- Experience: Cars delivered directly to waiting owners
The Volkswagen Group: A Multi-Brand Automotive Empire
The Autostadt serves as a powerful marketing platform for all Volkswagen Group brands:
- Audi
- Porsche
- Lamborghini
- Bentley
- Bugatti
- Ducati
- SEAT
- Škoda
- MAN
- Scania
Revenue Streams and Business Segments
Premium cars: More than half of total revenue
Trucks: 17% of total profit through strategic acquisitions:
- 1999: Acquired Volvo after antimonopoly authority blocked Scania-Volvo Trucks merger
- March 2008: Purchased controlling stake in Scania (71% voting shares)
- 2011: Acquired controlling stake in MAN
The Porsche Integration
Porsche represents the crown jewel in Volkswagen’s premium portfolio. The merger story involves competing Porsche family divisions:
- Porsche initially attempted to acquire larger Volkswagen
- Share acquisition led to significant debt
- 2009: Porsche sold 49.9% stake to Volkswagen
- 2012: Volkswagen fully consolidated Porsche for $5.7 billion
Conclusion: From People’s Car to Automotive Giant
From its origins as Hitler’s vision for a people’s car in 1933 to its current position as the world’s largest automotive manufacturer, Volkswagen’s journey spans innovation, resilience, and strategic growth. The company that began with the iconic Beetle now commands a diverse portfolio of premium brands, advanced technologies, and global manufacturing capabilities. Whether you drive a Volkswagen, Audi, Porsche, or any brand under the VAG umbrella, you’re experiencing the legacy of nearly nine decades of automotive excellence.
Remember, no matter which car you own from the Volkswagen family, you’ll need a valid driving license to enjoy it. An international driving permit makes traveling even more convenient, and you can easily process one through our website.
Published October 05, 2018 • 11m to read
