100 Things You Should Know About Mercedes-Benz | #9

The three-pointed star and the four rings under one roof.

“Companies vie for customers and are thus encouraged to use their resources as efficiently as possible (…) In other words, competition drives innovation and progress (…).” These statements can be found on the website of Germany’s Ministry of Economic Affairs. But what is the reality like? For many decades now, the German automotive industry has demonstrated that competition leads to more innovation and better products. Mercedes-Benz, BMW, and Audi are engaged in an ongoing healthy struggle for the pole position in the premium sector.

3 min reading time

by Christian Scholz, Editor
published on July 30, 2020

All three of these companies have benefited from this contest and at the same time preserved their distinctive brand profiles. However, few people now know that the three-pointed star and Audi’s four rings were once united under the roof of Daimler-Benz. In early 1958, the major shareholder Friedrich Flick decided that Daimler-Benz should acquire Auto Union GmbH because the companies would be a good fit and the takeover would generate synergies.

On April 1, 1958, the Supervisory Board of Daimler-Benz AG approved the acquisition of almost 88 percent of the share capital of Auto Union GmbH. Less than two years later, Auto Union became a wholly-owned subsidiary of Daimler-Benz AG.

Founded in 1932 as a result of the merger of DKW (Dampf-Kraft-Wagen), Audi, Horch, and Wanderer, Auto Union originally only had plants in Saxony. After World War II, it re-established itself in Ingolstadt and Düsseldorf, and began to produce DKW-brand motorcycles and automobiles in 1949. The two-stroke engine that had already equipped DKW automobiles before World War II was no longer up-to-date during the “economic miracle” of the 1950s. In fact, it increasingly became a burden that impaired DKW’s market performance. At the time of the acquisition, the parent company already knew that a four-stroke engine would need to be introduced to ensure the subsidiary’s economic survival.

Eventually, Daimler-Benz sent a team of engineers under the direction of Ludwig Kraus from Untertürkheim to Ingolstadt, where they developed a state-of-the-art, fuel-efficient four-cylinder engine to the series production stage. The engine, which bore the internal designation M 118, was designed in Stuttgart. It celebrated its premiere in September 1965 in Auto Union’s new Audi model. This vehicle was the first post-war car from Auto Union to feature a four-stroke engine as well as the first model of the Audi brand to appear since the end of World War II.

The new car laid the foundation for a success story. However, at its launch, the union between the three-pointed star and the four rings already was history. Effective from January 1, 1965, Volkswagen bought the majority (50.3%) of Auto Union. At the end of 1966, the company became a wholly-owned subsidiary of Volkswagen. However, a small amount of Mercedes-Benz DNA remained in the brand. Technical Director Ludwig Kraus and several other engineers from Mercedes stayed in Ingolstadt, where they helped Audi achieve its definitive breakthrough: the highly successful Audi 100 (1968), Audi 80 (1972), and Audi 50 (1974).

Auto Union has also left its mark on Mercedes. Where? In Düsseldorf! The facility, which had been in use since 1951, was leased by Auto Union GmbH to the parent company Daimler-Benz in 1962 after the former concentrated its production operations in Ingolstadt. When Auto Union was sold to Volkswagen, the Düsseldorf plant remained with Daimler-Benz. Today, more than 6,000 people work in Daimler AG’s biggest van plant worldwide. The facility is the lead plant for the global production of the Mercedes-Benz Sprinter. The star and the rings have benefited each other — whether as competitors or under the same roof.

Prototype of a compact Mercedes-Benz passenger car (W 119), 1962. Exterior, viewed from the front right. It never entered series production.
Prototype of a compact Mercedes-Benz passenger car (W 119), 1962. Exterior, viewed from the front right. It never entered series production.

In this column we present interesting, odd, or generally unknown facts from the world of Mercedes-Benz. We publish a new story in the series of “100 things you should know about Mercedes-Benz” regularly here on Mercedes-Benz Magazine.

Christian Scholz

As a child, he once made it into the Mercedes-Benz customer magazine in the 80s with a car drawing. At that time he crossed off-road vehicles and coupés with each other. Completely crazy! And so, after studying, he preferred to use a pencil for writing rather than drawing. After various jobs in public relations, he has been writing for Daimler/Mercedes-Benz since 2012 – about off-road vehicles and coupés and everything else that moves the company.

More about the author

All articles of this series