The history of the "People's Car”, Volkswagen, begins on May 28th 1937 when the "Geselschaft zur Vorbereitung des Deutschen Volkswagen mbH” company is created. A year later it is renamed into "Volkswagenwerk GmbH” has it's headquarters established in Wolfsburg, a city especially created for the workers on the Volkswagen plant that are going to mass produce Hitler's dream car for the average German, designed by Ferdinand Porsche.
But Hitler's plans weren't going to materialize because WWII started and the plant switched production to armaments and the vehicles under the VW logo went to the army of the Third Reich. After the war, the plant at Wolfsburg went under Allied control, British to be specific, and under the supervision of Major Ivan Hirst, Volkswagen began the mass production of the Type 1, or the Beetle as it would come to be known throughout the world.
Initial sales abroad were disastrous, but through clever advertising, the Beetle gained popularity with the young crowd and from 1945 to 1955 numbers reached the 1 million mark. Meanwhile, sometime at the end of the 40s, Volkswagen also introduced the Type 2, a people carrier, known as the "VW Bully”.
Even through the 60s and 70s, the Beetle manages to stay on top of sales, despite the fact that it was becoming obsolete. Reliability, easy maintenance and reduced fuel consumption made the car remain a consumer favorite. On February 17th 1972, Volkswagen celebrated selling over 15 million units of the Beetle sold, thus surpassing the Ford Model T as the most popular car in the world, a title which it still holds to this day.
Despite the success it had with the Beetle, by the beginning of the 70s, Volkswagen AG was in dire need of new models to replace the aging Beetle. The help came from Audi/Auto Union, which WV had bought back in the sixties. They brought with them the knowledge for front-wheel drive vehicles and water-cooled engines.