Volkswagen’s Transformation: From Wartime Origins to Modern Reinvention
By Rachel More
The Evolution of Volkswagen: Key Historical Milestones
BERLIN, Oct 28 (Reuters) - From a single-model company rising from the ashes of World War Two, to a sprawling automotive empire with global reach, Volkswagen has undergone repeated reinventions on its way to becoming the world's second-largest automaker.
Here is a look at the company's history as it faces what could become its biggest restructuring in its 89-year history.
The 'People's Car' of Nazi Germany
Hitler’s Vision for the German Auto Industry
In February 1933, days after becoming German chancellor, Adolf Hitler attends the Berlin motor show, using one of his first speeches in power to promote the German auto industry and announce a large-scale Autobahn-building effort.
Ferdinand Porsche and the Birth of Volkswagen
A year later, Austrian car designer Ferdinand Porsche, who later founded the namesake car brand, proposes a "people's car" or "Volkswagen", with four seats and speeds suited to the nation's new Autobahn network.
The idea is taken up by Hitler.
The Founding and Wartime Shift
In May 1937, the Nazi labour organisation German Labour Front (DAF) founds the "Corporation to Prepare the Way for the German People's Car", what we know today as Volkswagen. In February 1939, Ferdinand Porsche's KdF-Wagen, the precursor to the VW Beetle, is unveiled at the Berlin motor show.
Plans to mass produce the car and sell it to industrial workers through an instalment savings scheme never materialise as the outbreak of the war prompts a shift to armaments production and deliveries of utility vehicles for the German army.
Salvaging the Beetle
Postwar Recovery and British Influence
After the May 1945 surrender of Nazi Germany to Allied forces, ending the war in Europe, British Army engineer Ivan Hirst is sent to inspect the Volkswagen factory in Wolfsburg. He persuades occupation authorities to keep the factory and restart Beetle production.
The Beetle’s Global Success
A decade later in 1955, the one-millionth Beetle rolls off the Wolfsburg production line. It will go on to become driver of West Germany's postwar "Wirtschaftswunder" economic boom and an icon of 1960s "flower power" counterculture.
Privatization and State Ownership
In August 1960, Volkswagen is privatised, with the company's home state of Lower Saxony receiving a 20% stake, which it has retained until today.
VW's Rise to Multibrand Empire
Acquisitions and Expansion
In early 1965, Volkswagen acquires Auto Union GmbH and its dormant Audi brand from what was then Daimler-Benz, starting a decades-long transition from Beetle maker to the multibrand empire it is today.
The Golf and International Growth
In March 1974, production of the Volkswagen Golf begins. The Beetle successor becomes a bestseller for Volkswagen.
Entry into China
In 1983, as global trade flows are shifting, the first Chinese-built VW Santana rolls off the production line in Anting, marking the start of Volkswagen's rise in China — a key market that would go on to underpin its business model for decades.
Piech Era and Brand Expansion
A decade later, Ferdinand Piech, the grandson of Ferdinand Porsche, becomes Volkswagen CEO, launching a period of aggressive expansion that adds brands including Bentley, Lamborghini and Bugatti.
Porsche Takeover and Family Control
In 2008, Porsche attempts to take over Volkswagen, a plan that backfires and instead results in a reverse takeover in which Volkswagen acquires the smaller sports car brand. However, the Porsche and Piech families remain Volkswagen's top shareholders via their investment holding firm.
Dieselgate and the Big EV Clean-Up
The Emissions Scandal
In September 2015, the scandal broke over Volkswagen's use of illegal software to rig US emissions tests of its diesel engines, plunging the company into one of the biggest crises in automotive history and costing it more than €32 billion ($36 billion) in fines, refits and legal costs.
Pivot to Electric Vehicles
A pivot to electric vehicles follows and by 2019, then German Chancellor Angela Merkel hails Volkswagen's EV ambitions. She and then-CEO Herbert Diess watch the first ID.3 roll off the production line in Zwickau, VW's first all-electric car factory.
Leadership Turmoil and Transition Challenges
However, by September 2021, Diess warns that a mismanaged transition to EVs could cost the company 30,000 jobs. He is ousted the following year amid tensions with labour unions and problems with his software strategy.
China Turns from Profit Driver to Problem
Porsche IPO and Declining Sales
In September 2022, Porsche celebrates a blockbuster initial public offering, promising margins similar to those of rival sports brand Ferrari. Sales in China, however, begin to collapse soon after, turning the brand from cash cow to a drag on results in a matter of years.
Rise of Chinese Competitors
By 2023, Chinese EV champion BYD dethrones Volkswagen as China's top-selling automaker. Local competitors set the pace on software, development speed and pricing as the world's largest car market rapidly shifts to EVs.
New Entrants and Price Competition
More Chinese rivals, like smartphone maker Xiaomi, join the race, with cars, such as the SU7 electric sedan selling at around a third of the price of Porsche's Taycan.
Restructuring, and Restructuring Again
Job Cuts and Plant Closures
In late 2024, Volkswagen CEO Oliver Blume agrees with unions to cut 35,000 jobs at VW in Germany by the end of the decade, but plant closures are averted.
Tariffs and Financial Pressure
In April 2025, US President Donald Trump unveils sweeping tariffs that cost Volkswagen billions of euros a year, compounding pressure from China woes and mounting EV costs.
Mass Layoffs and Boardroom Decisions
By mid-2026, news emerges of plans by Volkswagen management to double layoffs across the group to 100,000, with up to four plants facing closure — including its model EV plant in Zwickau.
In September, Volkswagen's fractious supervisory board accepts the plan, with the unions and the state of Lower Saxony dropping their opposition — but only under pressure from management and the owner families.
($1 = 0.8905 euros)
(Reporting by Rachel More; Editing by Christoph Steitz and Tomasz Janowski)
