Adolf Hitler’s pet project was the development and mass production of an affordable yet still speedy vehicle that could sell for less than 1,000 Reich marks (about $140 at the time). To provide the design for this “people’s car,” Hitler called in the Austrian automotive engineer Ferdinand Porsche. On this day in 1937, the government of Germany formed a new state-owned automobile company which was renamed simply Volkswagenwerk, or “The People’s Car Company.” Today no one cheerfully supports Adolf Hitler’s work in these areas. In 1938, at a Nazi rally, the Fuhrer declared: “It is for the broad masses that this car has been built. Its purpose is to answer their transportation needs, and it is intended to give them joy.”
In a small miracle, an attractive car made of steel, powered by a 25 hp engine, and with enough room for four, even five, people, underwent hard testing. In 150,000 kilometers of test drives, it proved that it could easily maintain a speed of 100 kilometers per hour on the Autobahn. The test cars performed so well that it even astonished those who built them. Hardly any repairs were needed. In the mountains, the Volkswagen left larger cars behind, and also handled poor roads well. However, soon after the car was displayed for the first time at the Berlin Motor Show in 1939, World War II began, and Volkswagen halted production. After the war ended, with the factory in ruins, the Allies would make Volkswagen the focus of their attempts to resuscitate the German auto industry.
Volkswagen sales in the United States were initially slower than in other parts of the world, due to the car’s historic Nazi connections as well as its small size and unusual rounded shape. In 1959, the advertising agency Doyle Dane Bernbach launched a landmark campaign, dubbing the car the “Beetle” and spinning its diminutive size as a distinct advantage to consumers. Over the next several years, VW became the top-selling auto import in the United States. Twelve years later, the Beetle surpassed the longstanding worldwide production record of 15 million vehicles, set by Ford Motor Company’s legendary Model T between 1908 and 1927.
Reference:
http://www.history.com/this-day-in-history/volkswagen-is-founded
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