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A Brief History of The German Car Industry From 1885 to 1945

A Brief History of The German Car Industry From 1885 to 1945

This article gives a short account of the history of Daimler-Benz, BMW and Volkswagen from their beginnings up until 1945.


In 1885, Karl-Friedrich Benz (1844-1929) drove the world’s first successful petrol-driven car, the Motor-wagen, at Mannheim in Germany, which he had built.

Gottlieb Daimler (1834-1900) trained as an engineer. He became technical director of Gasmotorenfabrik Deutz, but he and researcher Wilhelm Maybach resigned in 1882 to set up their own experimental workshop in Cannstatt, near Stuttgart. Daimler completed his first motorized carriage in 1886.

The Daimler and Benz firms merged in 1926 to produce cars under the name Mercedes-Benz. The merger undoubtedly saved both companies from bankruptcy in the German Depression. The company grew throughout the 1930s, becoming very successful in automobile racing. This was used as Nazi propaganda – Hitler himself never being photographed in any car but a Mercedes.

In 1939, the state took over the German auto industry. During World War II Daimler-Benz produced trucks, tanks and aircraft engines. The company became a target for the Allied bombing raids, which in September 1944 destroyed 70% of its plants. 

BMW 1916-1945

Bayerische Motoren Werke was originally established in 1916 in Munich as a manufacturer of aircraft engines for the Austrian army. BMW’s first slump came after the production of aircraft engines, the Company’s only product at this time, was forbidden under the terms of the Treaty of Versailles (1919). In 1923 the first motorcycle came off the production line in Munich. In 1928 BMW took over the Eisenach Car Factory in Thuringia and, as part of the deal, developed BMW’s first car – the “Dixi”, in 1929.

After Hitler assumed power in 1933, Bayerische Motoren, with other auto firms, was required to manufacture airplane engines for the new air-force (Luftwaffe). In 1939, to increase production of aircraft engines, the German aircraft ministry required BMW to take over Brandenburgisches Motorenwerke in Berlin-Spandau.

BMW played an important role in the War, particularly in two areas of technology: under the guidance of Dr. Hermann Oewstrich of the German aviation test centre, BMW developed a jet engine -model 109-003 in 1943, which was to become one of the first jet engines in the world to enter standard production; and in 1944 BMW successfully tested its first rockets at its production facilities in Basdorf and Zühlsdorf.

When World War II ended in 1945 BMW was totally destroyed. The Eisenach and Dürrerhof factories, and the production facilities in Basdorf and Zühlsdorf were gone and the allies ordered that the Munich factory be dismantled, and the Allies imposed a three- year ban on any production activities by BMW in response to their production of aircraft engines and rockets during the war. 

VW 1934-1945

In 1934 the idea of a “Volkswagen”, literally a peoples’ car, was first mentioned by the Nazi government at the opening of the Automobile show. It represented the dreams of two men: Ferdinand Porsche and Adolf Hitler. Porsche had been a designer of luxury cars with Austro-daimler. He wanted to produce a small low-priced car for the general public, but had found no financiers.

On 22 June 1934 the Porsche Design office concluded a contract with the Reichsverband der deutschen Automobilindustrie to construct a “Volkswagen”. After the production of three VW3 prototypes in 1936 and 30 VW30 prototypes in 1937 the Volkswagen had taken on its final roundish shape. By 1938 this car became the centre of a plan to build an ideal workers city. Hitler’s original idea had been for the production to be split between the existing car-firms but costing problems overshadowed the project. According to Etzold the “German car industry had great difficulty putting forward solutions since no one had … experience of mass production on the planned scale. The figure of 1,000,000 vehicles per year envisaged by the Reich government could be scarcely imagined, yet alone costed.”

So on 26th May 1938 the foundation stone of the Volkswagenwerk, Europe’s largest car factory, was laid by Hitler near the village of Fallersleben, 50 miles east of Hanover. The town was named Wolfsburg on 25 May 1945.

In August 1938 the Volkswagen savings scheme was proclaimed by the Deutsche Arbeitsfront. By 1945 336,000 savers had concluded savings contracts worth 267 million Reichsmark, but had not received their cars, because wartime production had been converted to production of military vehicles. However, Etzold believes that the re-deployment of 3,000 workers employed on the Volkswagen site to construction of the Siegfried line in mid-1938 is evidence that the government had not included Volkswagen in its preparations for the coming war.

It was not until the recruitment of Heinrich Nordhoff in 1948 that Volkswagen finally started producing cars for the German public and the German economic miracle, the “Wirtschaftswunder”, began.

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