On 29 June 1932, when the four companies – Audi, DKW, Horch and Wanderer – merged to form the Auto Union, Zschopauer Motorenwerke/DKW was chosen to be the parent company for legal reasons. Between 1932 and 1936, the administrative headquarters of Auto Union AG were located in the DKW head office building in Zschopau, before moving to Chemnitz in 1936.
If Rasmussen and his Zschopauer Motorenwerke were important for the establishment of Auto Union AG, DKW products were no less important for the economic development of the new company. DKW motorcycles and cars with their typical two-stroke engines served the lower end of the market (the price category between 345 and 3,400 Reichsmarks) and represented the high-volume Auto Union model range.
DKW motorcycles were produced in such large quantities that in 1937 Auto Union with its DKW plant in Zschopau became the world’s largest motorcycle manufacturer, building a total of 55,470 motorcycles. The Zschopau-based manufacturer had already held this title before, in 1928.
A further important production area consisted of DKW stationary engines, of which there was an incredibly wide programme suitable for use in a variety of areas (e.g. agriculture, road construction, the fire brigade, the army and public authorities).
DKW products were acknowledged to be simple, practical, reliable, economical, durable and to perform well. In technological terms, the Zschopau-based company proved to be an innovative pioneer in the areas of two-stroke engines, front-wheel drives and body manufacturing (wooden and plastic bodies). This pioneering spirit also invigorated the innovative potential of Auto Union AG, which, from 1936 onwards, set up a Central Engineering Design Office (ZKB) in Chemnitz and a Central Testing Unit (ZVA) for all Auto Union brands.
DKW car production as an inter-company alliance was a masterly logistical achievement: the engines were manufactured at the main factory in Zschopau and the bodies produced at the DKW body manufacturing plant in the Spandau district of Berlin; the four-cylinder models with rear-wheel drive were also built there. Assembly of the front-wheel-drive models took place at the Audi plant in Zwickau.
During the late 1930s, the DKW brand provided Auto Union with the necessary potential to counter the expected competition from the ‘KdF-Wagen’ (the People’s Car or Volkswagen) by launching an equivalent model, the DKW F 9. This made Auto Union the only car manufacturer in Germany to have an early response ready to challenge this Volkswagen model.
After the war, the hugely popular, proven DKW products enabled the newly founded Auto Union GmbH in West Germany to gain a foothold and also drove forward renewed automobile-industry activity in Saxony in East Germany.