1929 Audi Dresden

In the second half of the 1920s, Germany had a large number of automobile companies that manufactured large, conventional cars. As surprising as it may seem to us, the German hyper-inflation of the early 1920s actually stimulated the manufacture and sales of these vehicles, as those with money were prepared to buy any tangible asset as a hedge against the rapid devaluation of the currency. By the mid-to-late 1920s, this undiscerning market had closed and many companies found themselves with stocks of very expensive vehicles they could not sell. August Horch's Audi company was in this very position. this is not to say that Audi's were poor vehicles. Horch's Audi prided itself on its engineering excellence, but excellence comes at a high price - a price the market was not prepared to pay when awash with rapidly depreciated large cars.

In 1928, the State Bank of Saxony approached Jorge Rasmussen, founder and principle of the JS Rasmussen Group, owner of DKW, to buy out the ailing Audi. DKW at this time was a rapidly growing motorcycle manufacturer - a highly profitable market - but was also experimenting with budget automobiles. The first DKW automobile, the P-15, went on the market earlier that very year. Rasmussen was keen to expand into fully-fledged automobile manufacturer and saw a golden opportunity to secure a prestige automaker. Shortly after taking over Audi, Rasmussen must have realized Audi was not the plum asset he had assumed. Audi production methods were archaic - especially compared to his beloved DKW, which had pioneered mass production techniques in its motorcycle division. Audi needed a comprehensive overhaul if it was to be returned to profit.

At the same time Rasmussen was negotiating the purchase of Audi, he'd been visiting the US to observe production line manufacturing there and secure the plant and machinery from the recently bankrupt Rickenbacker company. Rasmussen anticipated selling Rickenbacker's six and eight cylinder engines to other manufacturers. Unfortunately, that expectation came to nothing. Rasmussen's Rickenbacker engines found no market in Germany, so the initial production run were installed in the new Audi Dresden model, rebadged as Audi.

Unfortunately for Rasmussen and Audi, the Dresden also failed to sell. Only a few dozen were ever built. The market for big cars had evaporated. In desperation, Rasmussen re-engined the problematic DKW 1000 model with a 4-cylinder Peugeot motor and rebadged it as the Audi P, but it too failed to sell. This was the last hurrah for Audi and the factory in Chemnitz was given over to manufacturing the newly designed DKW Frontreib car. The Frontreib would become a best seller and the salvation of the company.

For more see:
The Audi P: https://dkwautounionproject.blogspot.com/2021/01/1931-audi-type-p-last-throw-of-dice.html
Rasmussen Engines: https://dkwautounionproject.blogspot.com/2020/07/1930-rasmussen-6-and-8-engines.html
1928 Audi Eight-Cylinder: https://dkwautounionproject.blogspot.com/2018/02/1928-audi-eight-cylinder.html
The Big DKW: https://dkwautounionproject.blogspot.com/2017/06/the-big-dkw-48.html