Below is my English translation of the article.
Auto-Union's Kleinwagen Odyssey
West German small car producers have decided to sell about 200,000 vehicles this year alone on the domestic market. The race for prospective buyers, which began in 1956, now involves 20 different types, ranging from the Messerschmitt cabin scooter (191 cc displacement) to the Borgward Lloyd-Alexander (596 cc).
Lloyd Alexanders at the 1957 Internationale Automobil-Ausstellung (motor show).
The Vespa 400 small car, the newest in the litter, will roll out of the workshops of the Augsburg Vespa GmbH to dealers in a few weeks. At the same time, NSU Werke AG in Neckarsulm also want to roll out their small car, the "Prinz", which the publicity-friendly NSU director-general Dr.-Ing. Gerd Stieler of Heydekampf revealed alongside beauty queen Petra Schürmann last September.
NSU Prinz at the 1857 Internationale Automobil-Ausstellung.
One model, however, which had been trimmed in a hurry shortly before the last Frankfurt International Motor Show, will not appear on the streets of Germany this year, nor probably in the next, although several hundred dealers are waiting on this make - the new little DKW. They cannot understand why Auto Union, which successfully built small cars bearing the DKW brand name before the war, missed out on the post-war small-car boom.
The Auto-Union stand at the 1937 Berlin Motor Show is dominated by the DKW range.
Even today, the 60,000 pre-war DKWs still on West German roads represent the long life and constructive reliability of the old DKW products. However a small post-war DKW is still not in sight. Although some mysterious DKW bodies are bumping over the slippery clinker streets of Oldenburg, which the Dusseldorf factory prefers to use as a test track, no one can say with certainty when this latest small car construction of Auto Union will be produced in series.
Years ago, the management had announced that the Auto Union would bring out a sensational small car with plastic body. The company wanted to build on a project in which they had experimented 20 years ago, when the Auto Union was still based in Saxony.
The Saxon auto company, which was created in 1932 by the merger of the distressed car companies Audi, DKW, Horch and Wanderer, had, during the years of the Third Reich developed a new type of car with a plastic body, which should be larger and more comfortable than the Volkswagen. This new car would offer motorists an alternative budget car to the Reich's Volkswagen.
The plan to develop a new plastic, budget car was made possible by the Director-General Dr.-Ing. Richard Bruhn. Dr Bruhn had been the driving force behind the re-establishment of the Auto-Union company in West Germany after their main plants located in Saxony were expropriated after 1945. The new small DKW was to help the old trademark to a new meaning. It would become the German small car par excellence: faster, more beautiful and roomier than the pre-war DKW, sportier and cheaper than the VW standard model. The design of such an ideal type was commissioned by former Porsche employee Professor Eberan von Eberhorst, 55, who designed the last Auto-Union racing car before the war. After the war, Eberan had worked as a racing car specialist, serving the English car companies Aston Martin and Lagonda.
As a base material polyester resin was chosen, which can be pressed under 20 atmospheres pressure in the desired shape. According to Eberan's calculation, the car would cost about 3400 marks and be 200 pounds lighter and about 1000 marks cheaper than a comparable model with a sheet metal body. The acquisition of the necessary production equipment, including a body-pressing plant - the professor promised - would cost only half as much as the construction of a traditional production line; approximately 35 million marks.
Even today, Eberan and his former assistant, Kurt Schwenk, swear they would have reached their target if they had not been hindered by "stronger forces." Although the last prototype had survived all driving and crash tests, the production-ready model was rejected at the end of 1956 - after 150,000 kilometers of driving.
Rejected plastic DKW: Three years in vain experiments.
The company at the time was in a state of unrest. The main shareholders - the multi-industrial Friedrich Flick, the Cologne banker Friedrich Carl Freiherr von Oppenheim and the Swiss millionaire Ernst Göhner - were dissatisfied with the company's performance. The yields had remained modest; the company was only able to distribute a dividend of six percent for the financial years 1954 and 55.
Fredrich Carl von Oppenheim.
When he laid the financial foundation for the reconstruction of Auto Union in Ingolstadt in 1949, the Banker Friedrich Carl Freiherr von Oppenheim had not foreseen that the company would descend into a stagnant phase. Director General Richard Bruhn and Sales Director Dr. Carl Hahn had used Oppenheim's money to built the new production plant in Ingolstadt, which the Auto-Union people called the "United hut works" because of its makeshift nature. The factory is still home to former Wehrmacht magazines, buildings and barracks. At first only vans and motorcycles were produced there. It was not until 1950, when the company settled in the vacant halls of the former Rheinmetall artillery factory in Dusseldorf, that car production started.
The company's main business focused on motorcycles until 1954. Before the start of the two-wheel sales crisis, every fourth newly registered motorcycle was a DKW machine. With their car production, however, the company always remained in the shade. This was due not only to the limited capacity of the main Düsseldorf plant, but also to the cost-cutting splitting of the fabrication across sites.
The DKW New Meisterklasse was introduced in 1950. It was compromise vehicle that combined the pre-war F8 chassis and running gear with the streamlined, steel body of the 1940 F9 prototype. https://dkwautounionproject.blogspot.com/2017/06/dkw-f89p-new-meisterklasse.html
Some of the accessories are manufactured in the "United hut works" of Ingolstadt and must be transported to Düsseldorf for assembly. The car bodies must even be sourced from foreign companies, since Auto-Union does not yet have its own press shop.
Despite the tightest calculations, the company could not compete with the VW on price, in which there is still a lot of 'air.' However, despite the unfavorable competitive situation, no one could dissuade those responsible at Auto-Union from "the DKW brand's robust two-stroke engine." Auto-Union's sales boss, Carl Hahn stressed, "Even today, like 20 years ago, a large community of German citizens do not want to belong to the mass of VW drivers and prefer a more exclusive vehicle".
Volkswagen Beetles at the 1957 Internationale Automobil-Ausstellung. The pure cost of the Wolfsburg factory per VW standard model are estimated at 2400 marks. The car is sold for 3790 marks.
This desire for something different was expressed in the three-cylinder "Sonderklasse 3 = 6", a type that was developed in 1939 and in production since 1953 with a modern 'hairstyle.' However, with inevitables changes and improvements, the car eventually became nearly as expensive (5750 marks) as a mid-size car. Auto-Union began to struggle to sell at least 200 wagons every month. With a reduction of number, production costs hardly broke even.
With the new small car, the management finally wanted to push forward to new business successes. For the company's business partners however, the plastic car seemed too risky. Above all, Flick mistrusted the car, after it was criticized by Dr. Ing. H.C. William Werner, 62, who Flick trusted.
William Werner, born an American, but who had acquired German nationality at the end of the twenties, was the former head of construction of Horch, in the old days of the Saxon automobile company. He had been appointed to a directorship in the new Auto-Union in mid-1956 at the request of the shareholders in the executive committee.
William Werner and Ferdinand Porsche talking during the pre-war period. Porsche was director of Auto-Union's racing car division.
The former American, who had been awarded the Knight's Cross of the Military Cross of Merit during the war as a defense expert, predicted that the plastic wagon suffered from a psychological handicap - buyers interested in small cars are caught in the obsession of being crushed in a collision. The plastic body would not inspire confidence. In addition, Werner had doubts about Eberan's cost calculation, and production would cost the company money.
The whole enterprise was a tragedy. Auto-Union had uselessly wasted money on experiments that even the largest automobile company in the world, the American General Motors Corporation, struggled to successfully complete.
The supports of the plastic body project pointed out that General Motors had already manufactured 30,000 Corvette plastic cars. To demonstrate to the shareholders that the new DKW was no worse than the American product, the plastic fanatics brought a Corvette from Switzerland to Dusseldorf.
The iconic Chevrolet Corvette is unveiled to great acclaim in 1954.
But it was in vain. With his spirited polemic, Werner swept the plastic model into the farthest corner of the "alchemist's kitchen," as Eberan's experimental studio was called. Shortly after, the professor (today employee of the Frankfurt Battelle Institute) and his assistant Schwenk (today design engineer at the Cologne Ford works) left, then followed a big changing of the guards.
The founder of the old Auto-Union, General Director Richard Bruhn, and the technical director Zerbst were retired. Sales boss Hahn left for health reasons and thenceforth devoted himself to his own company, a cosmetic-pharmaceutical factory. In addition, most factory directors, and with them many senior executives, quit the company.
Dr Hahn was involved in DKW from its very foundation and was an ardent enthusiast for the two-stroke motor.
Werner and the newly appointed commercial director Werner Henze, who enjoyed the trust of the Flick Group, began to make dramatic changes in 1956/57. The energetic William Werner began his regime with a harsh criticism of the current production program. He promised the associates he would stamp out 360 issues that he had discovered on Auto-Union's vehicles.
To improve earnings, two rationalization companies were commissioned to examine the two plants in Düsseldorf and Ingolstadt. During the rationalization campaign, about 2,000 workers and employees were dismissed.
In this change of operation, it was accepted that the production of the three-cylinder wagon "3=6" had to be reduced from 200 to 130 per day. While sales of all other West German car companies rose last year, Auto-Union passenger car sales shrank by 33 percent compared to 1956. It was even proposed to shut down the Ingolstadt plant to cut costs. If all production in Dusseldorf were concentrated, the rationalizers calculated, Auto-Union could save nearly five million marks in four years.
In the spirit of rationalization, the new management in Zons near Düsseldorf acquired building land on which a modern factory was to be built. But in the course of the past year, new forces were working on the new course, which made the new managing directors more urgent. The Auto-Union dealers, whose revenues have become compressed since the two-wheeler sales crisis, angrily demanded the long promised replacement small car.
When the dealers learned before the last Frankfurt automobile revue that Auto-Union had once again failed to put forward a small car for the Association of the Automotive Industry exhibition, they demanded from the Chairman of the Supervisory Board, Baron von Oppenheim, that he come clean about the company's plan. In order not to stand there empty-handed, the plastic critic William Werner designed a new small car with a sheet metal body, whose prototype was shown last September at the International Motor Show in Frankfurt, a four-seat sedan, which is more spacious than the Volkswagen (it would go on sale in 1958 as the DKW Junior).
The DKW 600 is revealed at the 1957 Internationale Automobile-Ausstellung. Technical data: Two-cylinder two-stroke engine with 660 cc, 30 hp; the car can reach a top speed of 110 km / h; estimated price: 4200 marks
However, for the time being it is not yet clear when the car will enter mass production. The management could only promise the dealers to provide them with around 1500 exhibition models during the second half of 1958. Mass production can begin at the earliest in 1959/60, when the necessary new factory, including Preßwerk, has been fully financed and set up.
Although Auto Union counts one of the richest West German industrialists, multimillionaire Friedrich Flick, as one of its shareholders (his fortune is estimated at 400 million marks), the financing problem is the critical point of the new project. Auto-Union desperately needed 50-60 million marks, but Flick was unwilling to spend money on the production of a yet-to-be-tested vehicle, which is unlikely to hit the market until the small car boom wears off.
Fredrich Flick, Germany's richest man, lived a very interesting life. He was an important industrialist and banker through the Nazi years, for which he was later prosecuted at Nuremburg and served six years. Despite this he retained his fortune and political influence in post-war Germany.
Flicks' reluctance not only colored the other shareholders, it also made it difficult for Auto-Union to seek credit from banks and foreign financial magnates, who wondered whether Flick had any confidence in Auto-Union. It was generally suspected that Flick wanted to limit himself to his lucrative interest in Daimler-Benz AG (he owns 37.5 percent of Daimler-Benz shares).
After all, the rationalization fanatics Werner and Henze, who would have preferred to shut down the Ingolstadt-based company, had no choice but seek assistance in Bavaria. They asked the President of the Bayerische Staatsbank, Dr. Alfred Jamin, who is a member of the Supervisory Board of Auto-Union, to provide credit assistance.
Since the State Bank could not assume the risk of such an investment alone, several banks and insurance companies began negotiating the formation of a consortium, which would provide as much as 30 to 40 million marks. The consortium under the leadership of the Bavarian State Bank approved only 25 million marks on the condition that the Bavarian state takes over the credit guarantee.
The Bavarian state tied to that guarantee the following conditions:
- The small car must be built in Ingolstadt;
- the workers fired there have to be re-employed, regardless of whether this was in line with the rationalization efforts of Auto-Union or not.
This commitment was made by the Bavarian state only after the major shareholders of Auto-Union, Flick and Göhner, had relieved their bank accounts of five million marks, which were used to increase the share capital of Auto-Union from 20 to 30 million marks. The rest of the money, which was still missing for the construction of the small car production, would be procured with "accounting", through profit withdrawals, depreciation and reversal of hidden reserves. The whole rationalization campaign, which cost nearly a million marks, has subsequently become a farce, because the Ingolstadt plant must be artificially kept alive to meet the requirements of the Bavarian state.
In Flick's headquarters at Dusseldorf's Friedrichstrasse, this criticism is done with a light gesture. Says Friedrich Flicks cousin, Konrad Kaletsch, the representative of Friedrich Flick KG, in the style of financial magnates. "The birds (from the Auto-Union) should not talk so much, but ensure that decent cars are built; much too much talk."
Meanwhile, back in the Saxon home of Auto-Union, in the former Zwickau plant, small cars with plastic bodies have been rolling off the line for about three weeks.
What DKW couldn't achieve, DKW's East German successor, IFA could. The AWZ P70 was basically a modernised F8 with a ponton body made from Dynaplast, a plastic resin impregnated cotton. For the story of IFA's people's cars, see: https://dkwautounionproject.blogspot.com/2017/07/trabant-east-german-peoples-car.html
For the story of the Decline of DKW see: https://dkwautounionproject.blogspot.com/2019/06/the-decline-of-dkw.html
Film of the 1957 Internationale Automobile-Ausstellung. This is volume 1 of a series of 3.
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