Did You Know That Daimler Had Bought Audi And Then Sold It To VW?

Imagining a world where the Audi R8 is a corporate cousin of the Mercedes-AMG GT is not something that would happen in a parallel universe, but something that very well might have happened for real.

The story starts 60 years ago, when Daimler acquired a majority stake in Auto Union at the request of Friedrich Flick, who pushed for a merger between the two companies. Flick was a major shareholder in both automakers and used his influence to set up a deal as he believed the companies had products that would complement each other.

Daimler-Benz AG acquired nearly 88 percent of Auto Union and would eventually purchase the remaining shares on New Year’s Eve in 1959. As this was happening, Auto Union was constructing a new plant in Ingolstadt and eventually decided to move its entire production capacity there. Daimler ended up leasing the old Auto Union factory in Düsseldorf before it was eventually sold to one of its subsidiaries in 1962.

Auto Union used the funds from the factory sale and an additional 340 million Deutsche marks from Daimler to modernize its lineup. To assist with the process, Daimler sent one of its most capable engineers to Ingolstadt in 1963. Ludwig Kraus didn’t come empty handed as he brought a team of employees and a nearly complete four-cylinder engine dubbed the M 118.

This was a miracle for Auto Union, as the company was only producing two-stroke engines at the time. The new engine would eventually debut in the first post-war Audi which was introduced in 1965.

Daimler eventually sold its stake in Auto Union and the company became a wholly-owned subsidiary of Volkswagen in 1964. However, Daimler says their influence remained as Kraus became the company’s technical director and was familiar with a number of Mercedes models that were under development. The automaker went on to say its’s “not surprising that the body of the first Audi 100 developed at Auto Union shares features with the W 119″ as well as the Mercedes-developed engine.

  • Bash

    Wow, I did not know that.

    • Autoexperte

      Did you know that BMW was about to be taken over by Daimler in 1959?
      BMW was in a major crisis, but Herbert Quandt prevented the takeover by Daimler, by stocking up on BMW shares and refused to sell. He knew then that BMW was developing a car that Quandt was convinced could save the company from ruin, the New Class of BMW.

      • Bash

        Imagine what would be today if Daimler owns Mercedes, BMW, Audi and Jaguar…

  • Mill0048

    Thanks for sharing that. I’ll probably never get to visit, yet I’ve spent a couple hours learning Horst/DKW/NSU/Audi history just now. 🙂

    • Christian Wimmer

      Anytime. I love going to car museums all over Germany. Unfortunately some of them have wonderful exhibits but are so small that the vehicles are arranged in such a fashion which makes taking aesthetic snapshots next to impossible.

  • LWOAP

    Daimler also owned Chrysler at one point in time didn’t they?

    • Honda NSX-R

      Yes they have, from the late 1990s to 2009 or so

    • Six_Tymes

      yep, and at the time merc stole almost all the good designers away.

      • blunt-o

        You’re joking, right? A European company stealing American designers? Why would they?

        • Enter Ranting

          You’re not aware that even Mercedes copied the tail fin craze invented by American designers?

  • YES. CAR HISTORY IS QUITE FASCINATING. WALTER CHRYSLER ONCE HEADED UP BUICK, LINCOLN AND CADILLAC WERE STARTED BY THE SAME PERSON, THE DODGE BROTHERS MADE BODIES FOR FORD…

  • Timothy Gough

    Probably the reason why Audi will never be able to make a car better or anywhere as good as a Mercedes/Daimler. Daimler literally kept them alive with engines, financial resources, human resource etc. Audi needs to send a massive financial tribute and “Thank You” note every year to Daimler.

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