In the 1930s, the race was on to build a car for the German people.
Adolf Hitler – suffering from automobile envy and peeved that the average American was speeding around in an affordable car but the average German wasn’t – made his desires known. He demanded that a car be produced that could convey the model Aryan family of two adults and three children along Germany’s fancy new roads at speeds of up to 100kmh, for the price of 990 reichmarks.
So in 1933, he instructed Ferdinand Porsche to build such a car. Porsche built three prototypes, one of which was instantly recognisable as the iconic Beetle. It was initially called the Kdf-Wagen named after the ideal of ‘strength through joy’, or Kraft durch Freude.
And so on this day in 1937, the Society to Prepare the German People’s Car – Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH was founded, and was soon abbreviated to the rather more snappy Volkswagenwerk GmbH.
The government allocated 480,000 reichmarks as start-up capital for the construction of a new factory, and on 26 May, 1938, Hitler laid the foundation stone in the Stadt des KdF-Wagens – renamed Wolfsburg in 1945, and still the home of Volkswagen today.
It was originally operated by the German Labor Front. The company began as a piece of Hitler’s project to develop more autobahns as well as an affordable car to drive on them. The goal was to sell the vehicles for less than 1,000 Reich marks — the equivalent of $140 at the time, so they could truly be the car for everyone. At a Nazi rally Hitler said, “It is for the broad masses that this car has been built. Its purpose is to answer their transportation needs, and it is intended to give them joy.”
After WWII, the factory found itself in the British occupied sector of Germany and was handed over to Major Ivan Hirst to run on behalf of the British military government. He persuaded the British Army to order 20,000 cars for its occupying personnel, effectively saving the company from ruin.
The company’s historic connections to the Nazi party dampened sales initially, but not forever. In 1959, an advertising campaign was launched that gave the company’s car the famous name, “Beetle”, and promoted the small size and unique shape of the car. Following the rebranding of the company, VW became the top-selling automotive import in the United States.
The business, now renamed just Volkswagen was offered to various US and British car companies, who all rejected it. So in 1949, the company was made into a trust controlled by the West German government, and administered by the state of Lower Saxony, which still owns 20%. The German federal government floated its stake on the German stockmarket in 1960.
The company went from strength to strength, becoming a potent symbol of German post-war regeneration. It suffered problems in the 1970s, but came back stronger to become the world’s second-largest vehicle-maker, behind Toyota.