Like most German manufacturing, at the onset of World War II the Auto Union plants

were retooled for military production, and were a target for allied bombing during
the war which left them damaged.

Overrun by the Soviet Army in 1945, on the orders of the Soviet Union military
administration the factories were dismantled as part of war reparations.[23]
Following this, the company's entire assets were expropriated without compensation.
[23] On 17 August 1948, Auto Union AG of Chemnitz was deleted from the commercial
register.[22] These actions had the effect of liquidating Germany's Auto Union AG.
The remains of the Audi plant of Zwickau became the VEB (for "People Owned
Enterprise") Automobilwerk Zwickau [de] or AWZ (in English: Automobile Works
Zwickau).

With no prospect of continuing production in Soviet-controlled East Germany, Auto

Union executives began the process of relocating what was left of the company to
West Germany. A site was chosen in Ingolstadt, Bavaria, to start a spare parts
operation in late 1945, which would eventually serve as the headquarters of the
reformed Auto Union in 1949.

The former Audi factory in Zwickau restarted assembly of the pre-war-models in

1949. These DKW models were renamed to IFA F8 and IFA F9 and were similar to the
West German versions. West and East German models were equipped with the
traditional and renowned DKW two-stroke engines. The Zwickau plant manufactured the
infamous Trabant until 1991, when it came under Volkswagen control—effectively
bringing it under the same umbrella as Audi since 1945.

New Auto Union unit

A new West German headquartered Auto Union was launched in Ingolstadt with loans
from the Bavarian state government and Marshall Plan aid.[23] The reformed company
was launched 3 September 1949 and continued DKW's tradition of producing front-
wheel drive vehicles with two-stroke engines.[23] This included production of a
small but sturdy 125 cc motorcycle and a DKW delivery van, the DKW F89 L at
Ingolstadt. The Ingolstadt site was large, consisting of an extensive complex of
formerly military buildings which was suitable for administration as well as
vehicle warehousing and distribution, but at this stage there was at Ingolstadt no
dedicated plant suitable for mass production of automobiles: for manufacturing the
company's first post-war mass-market passenger car plant capacity in Düsseldorf was
rented from Rheinmetall-Borsig. It was only ten years later, after the company had
attracted an investor, when funds became available for construction of major car
plant at the Ingolstadt head office site.

In 1958, in response to pressure from Friedrich Flick, then the company's largest
single shareholder,[24] Daimler-Benz took an 87% holding in the Auto Union company,
and this was increased to a 100% holding in 1959. However, small two-stroke cars
were not the focus of Daimler-Benz's interests, and while the early 1960s saw major
investment in new Mercedes models and in a state of the art factory for Auto
Union's, the company's aging model range at this time did not benefit from the
economic boom of the early 1960s to the same extent as competitor manufacturers
such as Volkswagen and Opel. The decision to dispose of the Auto Union business was
based on its lack of profitability.[25] Ironically, by the time they sold the
business, it also included a large new factory and near production-ready modern
four-stroke engine, which would enable the Auto Union business, under a new owner,
to embark on a period of profitable growth, now producing not Auto Unions or DKWs,
but using the "Audi" name, resurrected in 1965 after a 25-year gap.

In 1964, Volkswagen acquired a 50% holding in the business, which included the new
factory in Ingolstadt, the DKW and Audi brands along with the rights to the new
engine design which had been funded by Daimler-Benz, who in return retained the
dormant Horch trademark and the Düsseldorf factory which became a Mercedes-Benz van
assembly plant. Eighteen months later, Volkswagen bought complete control of
Ingolstadt, and by 1966 were using the spare capacity of the Ingolstadt plant to
assemble an additional 60,000 Volkswagen Beetles per year.[26] Two-stroke engines
became less popular during the 1960s as customers were more attracted to the
smoother four-stroke engines. In September 1965, the DKW F102 was fitted with a
four-stroke engine and a facelift for the car's front and rear. Volkswagen dumped
the DKW brand because of its associations with two-stroke technology, and having
classified the model internally as the F103, sold it simply as the "Audi". Later
developments of the model were named after their horsepower ratings and sold as the
Audi 60, 75, 80, and Super 90, selling until 1972. Initially, Volkswagen was
hostile to the idea of Auto Union as a standalone entity producing its own models
having acquired the company merely to boost its own production capacity through the
Ingolstadt assembly plant – to the point where Volkswagen executives ordered that
the Auto Union name and flags bearing the four rings were removed from the factory
buildings. Then VW chief Heinz Nordhoff explicitly forbade Auto Union from any
further product development. Fearing that the Volkswagen had no long-term ambition
for the Audi brand, Auto Union engineers under the leadership of Ludwig Kraus
developed the first Audi 100 in secret, without Nordhoff's knowledge. When
presented with a finished prototype, Nordhoff was so impressed he authorised the
car for production, which when launched in 1968, went on to be a huge success. With
this, the resurrection of the Audi brand was now complete, this being followed by
the first generation Audi 80 in 1972, which would in turn provide a template for
VW's new front-wheel-drive water-cooled range which debuted from the mid-1970s
onward.

Audi 80 assembly line in Wolfsburg, 1973

In 1969, Auto Union merged with NSU, based in Neckarsulm, near Stuttgart. In the
1950s, NSU had been the world's largest manufacturer of motorcycles, but had moved
on to produce small cars like the NSU Prinz, the TT and TTS versions of which are
still popular as vintage race cars. NSU then focused on new rotary engines based on
the ideas of Felix Wankel. In 1967, the new NSU Ro 80 was a car well ahead of its
time in technical details such as aerodynamics, light weight, and safety. However,
teething problems with the rotary engines put an end to the independence of NSU.
The Neckarsulm plant is now used to produce the larger Audi models A6 and A8. The
Neckarsulm factory is also home of the "quattro GmbH" (from November 2016 "Audi
Sport GmbH"), a subsidiary responsible for development and production of Audi high-
performance models: the R8 and the RS model range.

Modern era
The new merged company was incorporated on 1 January 1969 and was known as Audi NSU
Auto Union AG, with its headquarters at NSU's Neckarsulm plant, and saw the
emergence of Audi as a separate brand for the first time since the pre-war era.
Volkswagen introduced the Audi brand to the United States for the 1970 model year.
That same year, the mid-sized car that NSU had been working on, the K70, originally
intended to slot between the rear-engined Prinz models and the futuristic NSU Ro
80, was instead launched as a Volkswagen.

After the launch of the Audi 100 of 1968, the Audi 80/Fox (which formed the basis
for the 1973 Volkswagen Passat) followed in 1972 and the Audi 50 (later rebadged as
the Volkswagen Polo) in 1974. The Audi 50 was a seminal design because it was the
first incarnation of the Golf/Polo concept, one that led to a hugely successful
world car. Ultimately, the Audi 80 and 100 (progenitors of the A4 and A6,
respectively) became the company's biggest sellers, whilst little investment was
made in the fading NSU range; the Prinz models were dropped in 1973 whilst the
fatally flawed NSU R