Audi’s history goes back to the very early days of the automobile.
The company’s founder, August Horch, started A. Horch & Company in November of 1899—some 13 years after Karl Benz and Gottlieb Daimler built the first automobile. A political dispute caused him to leave that company and start another one in 1909; Horch Automobil-Werke GmbH.
Unfortunately, when he was forced out of his first company, Horch lost the right to use his own name on products. His former partners had trademarked it, so he had to come up something new. Discussing the problem at a friend’s apartment, the friend’s son (doing his Latin homework at the time) overheard them talking and suggested the name "Audi". In the German language, the word horch means basically to listen, which, in Latin is audi.
In 1910, Horch produced the first of the Audi autmobiles.
Horch operated independently until the Great Depression forced him to sell shares in the company. In 1932, Audi merged with the brands Horch, DKW, and Wanderer to form Auto Union. In today’s four-ringed Audi logo, each of the rings represents one of the four Auto Union companies. The first ring represents Audi automobiles, the second DKW, third is Horch, and the fourth is Wanderer.
And yes, the close approximation of the Olympic rings did eventually get questioned.
The International Olympic Committee sued Audi in International Trademark Court.
One of the greatest strengths of Auto Union was its racing cars, which is where the four rings first appeared. Auto Union’s silver Grand Prix cars from the 1930s dominated the sport and established records that stood for several decades. Auto Union’s chief engineer? One Ferdinand Porsche (yeah, the same Ferdinand Porsche whose name now adorns some of the most coveted sports cars ever produced).
Prior to the emergent dominance of Auto Union, Mercedes-Benz had been the leading team in Grand Prix racing. Auto Union and Mercedes-Benz were pitted against one another in 1934, offering cash to support development—as well as a major cash infusion to the company winning the most races that year.
In so doing, he made the Germans nearly unbeatable in Grand Prix racing, engendered an era of technological development in the automotive field that advanced the industry mightily, and kept Auto Union alive to become the car company we know today as Audi. Auto Union was the pre-eminent force in racing for a number of years—winning 25 races between 1935 and 1937. Its cars were so powerful they could break into wheel spin at 100 miles per hour.
However, Mercedes-Benz got the last laugh.
In 1958, Daimler-Benz (the parent company of Mercedes-Benz) acquired controlling interest in Auto Union, and bought the company outright in 1959. By 1964, the other three companies forming Auto Union were dead—only Audi remained. That year, Volkswagen bought a 50 percent stake in the company and subsequently bought Auto Union outright in 1965.
Audi cars hav been part of Volkswagen ever since.
The first Audi vehicle to gain notice in the United States was the Audi Fox. The model came to the U.S. with the Audi 100LS in the 1970s. While the Fox was prized for its crisp styling and sprightly handling, the 100LS was rather dowdy and didn’t make much of an impact. However, the follow up car to the 100LS, built upon the styling of the Fox and called the Audi 5000, attracted a lot of attention. Large, luxurious, and featuring what would soon come to be a hallmark of Audi’s cars—a deliciously inviting interior treatment—the Audi 5000 made the company an overnight success.
Well, for a little while anyway...
During this period Audi took advantage of a change in the rules for rally cars permitting the use of four-wheel drive. The Audi Quattro (which means four in Italian) made its competition debut in 1980, and went on to dominate the sport throughout the 1980s. A road car based on the racing car was developed, giving Audi automobiles its first modern high performance passenger car. The turbocharged all-wheel drive Audi Quattro made 160 horsepower from 2.1 liters of displacement and established all-wheel drive as a significant aspect of Audi auto's DNA.
By the way, the only Audi vehicles to feature the word quattro with a capital Q on its badging is that first racing car. To honor its success, all subsequent usages begin with a lowercase q.
The company was riding high when the "unintended acceleration" scandal hit the Audi 5000 in the late 1980s. Audi’s emergence into popular culture, and the price point at which Audi cars were offered had attracted a lot of first-time European-car buyers out of American luxury cars. It is generally agreed the smaller continental pedal set and their closer proximity to one another (ideal for high performance driving) confused a lot of American drivers, leading them to apply the throttle when they wanted the brakes.
The problem inflated considerably when the CBS news magazine show 60 Minutes showed a 5000 rigged to accelerate without a driver at the wheel. The resulting panic dropped the bottom out of the sales of Audi automobiles and nearly ran the company out of the American market. Audi's U.S. sales volume, which had reached 74,061 in 1985, dropped to 12,283 in 1991, and stayed flat for three years. It took another nine years for Audi’s numbers to get back to where they were in 1985.
Needless to say, the company killed the 5000 name.
Today’s “A” nomenclature scheme was introduced in 1994, with the technological tour de force that is the Audi A8. First sold in the U.S. in 1997, the A8 featured a powerful V8 engine and an all aluminum body known as the Audi Space Frame—making it the lightest luxury car in its class. Building upon that, Audi's current sports cars, the TT and the R8, also use aluminum space frames. Known today for combining luxury with sporting attributes, Audi’s success with all-wheel drive has forced every luxury manufacturer to offer the drivetrain.