Volkswagen (), commonly abbreviated to VW, is a German automobile brand based in Wolfsburg, Lower Saxony, Germany. Established in 1937 by the German Labour Front, it was revived after World War II by British Army officer Ivan Hirst and, over the years since, grew into the global brand it is today. As of 2025, the company had a market capitalization of approximately . The brand is well known for the Beetle and serves as the flagship brand of its eponymous conglomerate, the Volkswagen Group, which was the world's largest automotive manufacturer by global sales in 2016 and 2017.
The name derives from the German words () and (), meaning , or more directly .
History
1932–1938: People's Car project Volkswagen was established in 1937 by the Nazi Party's German Labour Front () as part of the Strength Through Joy (, abbreviated to KdF) program in Berlin. In the early 1930s, cars were a luxury; most Germans could afford nothing more elaborate than a motorcycle, and only one out of 50 Germans owned a car. Seeking a potential new market, some car makers began independent "people's car" projectsthe Mercedes 170H, BMW 3/15, Adler AutoBahn, Steyr 55 and Hanomag , among others.
The growing trend was not new; Béla Barényi, a pioneering automotive engineer, is credited as already having conceived the basic design during the mid-1920s. Josef Ganz developed the Standard Superior (going as far as to advertise it as the "German Volkswagen"). In Germany, Hanomag mass-produced the 2/10 PS Kommissbrot, a small, cheap rear-engined car, from 1925 to 1928. Also, in Czechoslovakia, the Hans Ledwinka-designed Tatra T77, a very popular car amongst the German elite, was becoming smaller and more affordable at each revision. Ferdinand Porsche, a well-known designer for high-end vehicles and race cars, had been trying for years to get a manufacturer interested in a small car suitable for a family. He built a car known as the from the ground up in 1933, using many popular ideas and several of his own, putting together a car with an air-cooled rear engine, torsion bar suspension, and a "beetle" shape, the front bonnet rounded for better aerodynamics (necessary as it had a small engine).
In 1934, with many of the aforementioned projects still in development or early stages of production, Adolf Hitler became involved, ordering the production of a basic vehicle capable of transporting two adults and three children at . He wanted a car every German family would be able to afford. The "People's Car" would be available through a savings plan at , equivalent to in about the price of a small motorcycle (the average income being around a week, equivalent to in ).
It soon became apparent that private industry could not turn out a car for only . Thus, Hitler chose to sponsor an all-new, state-owned factory using Ferdinand Porsche's design (with some of Hitler's design suggestions, including an air-cooled engine so nothing could freeze). The intention was that German families could buy the car through a savings scheme ("", ), which around 336,000 people eventually paid into.. However, the project was not commercially viable, and only government support was able to keep it afloat. Due to the outbreak of World War II in 1939, none of the participants in the savings scheme ever received a car. In 1950, a lawsuit was issued that, after 12 years of trial, ultimately provided a credit of 12% off the list price of a new VW base model or roughly 20% of the value originally paid into the saving scheme.
Prototypes of the car called the (from the German term , meaning ) first appeared in 1938. The first cars had been produced in Stuttgart. The car already had its distinctive round shape and air-cooled, flat-four, rear-mounted engine. The VW car was just one of many KdF programs, which included tours and outings. The prefix () was not just applied to cars, but also to other products in Germany, such as the radio receiver. On 28 May 1937, (), or for short, was established in Berlin by the German Labour Front (), the national labour organization of the Nazi Party. More than a year later, on 16 September 1938, it was renamed .
Erwin Komenda, the longstanding Auto Union chief designer, part of Ferdinand Porsche's hand-picked team, developed the car body of the prototype, which was recognisably the Beetle known today. It was one of the first cars designed with the aid of a wind tunnela method used for German aircraft design since the early 1920s. The car designs were put through rigorous tests and achieved
The construction of the new factory started in May 1938 in the new town of (now known as Wolfsburg), which had been purpose-built for the factory workers. This factory had only produced a handful of cars by the time war started in 1939. None were actually delivered to any holder of the completed saving stamp books, though one Type 1 Cabriolet was presented to Hitler on 20 April 1944, his 55th birthday.
1939–1944: Wartime production and Nazi concentration camp labour
World War II shifted the company's priorities to military vehicles manufactured for German forces: the (Kübelwagen, ) utility vehicle (VW's most common wartime model), and the (, ), the most-produced amphibious car in history. One of the first foreigners to drive a Volkswagen was Ernie Pyle, an American war correspondent who had the use of a captured Volkswagen for a few days after the Allied victory in Tunisia in May 1943. As was common with much of the production in Nazi Germany during the war, slave labour was utilised in the Volkswagen plant, such as from the Arbeitsdorf concentration camp. The company would admit in 1998 that it used 15,000 slaves during the war effort. German historians estimated that 80% of Volkswagen's wartime workforce was slave labour. Many of the slaves were reported to have been supplied from the concentration camps upon request from plant managers. A lawsuit was filed in 1998 by survivors for restitution for the forced labour. Volkswagen would set up a voluntary restitution fund.
1945–1948: British military intervention
In April 1945, KdF-Stadt and its heavily bombed factory were captured by the U.S. Army and subsequently handed over to the British, within whose occupation zone the town and factory fell. The factory was placed under the control of British Army officer Major Ivan Hirst, REME, a civilian Military Governor with the occupying forces. One initial plan was to use it for military vehicle maintenance, and possibly dismantle and ship it to Britain. The equipment could have been salvaged as war reparations since the factory had been used for military production (though not of KdF-Wagens) and had been, in Hirst's words, a "political animal" rather than a commercial enterprise, technically making it liable for destruction under the terms of the Potsdam Agreement. Allied dismantling policy changed in late 1946 to mid-1947, though heavy industry continued to be dismantled until 1951.
One of the factory's wartime KdF-Wagen cars had been taken to the factory for repairs and abandoned there. Hirst had it repainted green and demonstrated it to British Army headquarters. In September 1945, the British Army, short of light transport, was persuaded to place a vital order for 20,000 cars. However, production facilities had been massively disrupted; there was a refugee crisis at and around the factory, and some parts (such as carburettors) were unavailable. Hirst and his German assistant Heinrich Nordhoff (who went on to run the Volkswagen factory after military involvement ended in 1949) helped to stabilise the acute social situation while simultaneously re-establishing production. Hirst, for example, used his engineering experience to arrange the manufacture of carburettors, the original producers being effectively "lost" in the Soviet zone. The first few hundred cars went to personnel from the occupying forces, and to the postal service. Some British service personnel were allowed to take their Beetles back to the UK when they were demobilised.
The post-war industrial plans for Germany set out rules that governed which industries Germany was allowed to retain. These rules set German car production at a maximum of 10% of 1936 car production. By 1946, the Volkswagen factory produced 1,000 cars a month, even though it was still in disrepair. Due to roof and window damage, production had to stop when it rained, and the company had to barter new vehicles for steel for production.
The car and its town changed their World War II-era names to "Volkswagen" and "Wolfsburg", respectively, and production increased. It was still unclear what was to become of the factory. It was offered to representatives from the American, Australian, British and French motor industries, who all rejected it. After an inspection of the plant, Sir William Rootes, head of the British Rootes Group, told Hirst that the project would fail within two years, and that the car "...is quite unattractive to the average motorcar buyer, is too ugly and too noisy. If you think you're going to build cars in this place, you're a bloody fool, young man." The official report said: "To build the car commercially would be a completely uneconomic enterprise."
American Ford representatives were equally critical. In March 1948, the British offered the Volkswagen company to Ford free of charge. Henry Ford II, the son of Edsel Ford, traveled to West Germany for discussions. Heinz Nordhoff was also present, as well as Ernest Breech, Ford's chairman of the board. Henry Ford II looked to Breech for his opinion, and Breech said, "Mr. Ford, I don't think what we're being offered here is worth a damn!" Ford passed on the offer, leaving Volkswagen to rebuild itself under Nordhoff's leadership.
1948–1961: Icon of post-war West Germany
From 1948 onwards, Volkswagen became an important element, symbolically and economically, of West German regeneration. Heinrich Nordhoff, a former senior manager at Opel who had overseen civilian and military vehicle production in the 1930s and 1940s, was recruited to run the factory in 1948. In 1949, Major Hirst left the company, which had been reformed as a trust controlled by the West German government and the government of the state of Lower Saxony. Apart from the introduction of the Volkswagen Type 2 commercial vehicle (van, pick-up, and camper) and the Karmann Ghia sports car, Nordhoff pursued a "one-model" policy of focusing on the Type 1 "Beetle" sedan until shortly before his death in 1968.
Volkswagens were first exhibited and sold in the United States in 1949, but sold only two units in the region that first year. On entry to the US market, the VW was briefly sold as a Victory Wagon. In April 1955, Volkswagen of America was formed to standardise sales and service in the US. Production of the Type 1 Volkswagen Beetle increased dramatically over the years, the total reaching one million in 1955.
The UK's first official Volkswagen importer, Colborne Garages of Ripley, Surrey, started business with importing parts for the models brought home by soldiers returning from Germany.
Canadian Motors, Limited brought in Canada's first shipment of Volkswagens on 10 July 1952 (shipping order 143075). The order consisted of 12 vehicles:
three model 11C, a black, a green, and a sand colour three 11GS, a chestnut brown and two azure blue two 24A-M51 in red one 21A in blue one 23A in blue one 22A beige colour one ambulance
Volkswagens were seen in Canada for the first time at the Canadian National Exhibition in August 1952, and were accepted enthusiastically (at least one Type 2 bus from this order still exists, and is currently in France undergoing restoration). The first shipment for Volkswagen Canada reached Toronto in early December 1952 (at least one Type 1 from this first shipment still exists, and was driven on a nationwide tour for Volkswagen Canada's 60th year of business festivities in 2012).