Second largest subsidiary of the German Volkswagen-Audi Gruppe (VAG) besides
Volkswagen that produces luxury mass-production cars.
Audi has a history that reaches as far back as Mercedes Benz. August Horch (1868 - 1951) founded A Horch & Cie in Germany on November, 1899. He had a dispute with the shareholders by 1910 and left the company to found a new car company Audi, the latin translation of his surname which means "to listen."
Fast forward to 1932 and the Great Depression had left many of the car manufacturers struggling. Audi formed with three other German manufacturers to form the Auto Union. The Audi company merged with its former company Horch, Wanderer, and DKW using four interlocking rings as its new symbol still seen today on the roads.
The roaring thirties would be known as the Golden Age of automobile racing. The first Grand Prix's of this age were the predecessor to such grand races as Formula One. Hitler, in his bid for Germany to become the greatest automobile nation in the world, had laid down such projects as the Autobahn and also started a racing program. He was a big Mercedes fan and was about to fund Mercedes to become the greatest racing company in the world. However, Auto Union stepped in and convinced him to split the funds to Mercedes and Auto Union. This would start the domination of both German giants for this age.
It was the german Silver Arrows that would take the scene by storm. The legend goes that Mercedes found its car to be 1 kilo over the weight limit so they removed the paint. The color was a hit and became the racing color of Germany. These machines dominated their Italian counterparts via high top speeds and excellent acceleration. Many technologies would be developed in this heady age including mid-engine placement,wind tunnel testing, and in-car monitoring; all developed by Auto Union. Working for Auto Union was a rather important fellow in car-dom named Ferdinand Porsche.
The company was dismantled after World War II and taken mostly by the Soviets. However a group of ex-directors restablished the Union in Ingolstadt, Germany in West Germany where it still resides today. The company grew again slowly before it was taken over by former rival Mercedes in 1958. In 1965, Volkswagen purchased just a bit over 50% of Auto Union shares and would become a part of the German giant to this day. The company was put to work producing Beetles before Auto Union re-established themselves by introducing the Audi 100. It would become a wild success and the Audi part of the Auto Union would slowly become the dominant nameplate as the other former parts of the company faded. In 1969, Auto Union AG would merge with NSU to become Audi NSU Auto Union AG. NSU had developed such innovations as the rotary engine now made famous by Mazda and a motorcycle with the lowest-drag ever. In was also in this period that Audi established its slogan "Vorsprung durch Technik" roughly translated into "Advancement through technology."
In 1980, the famous Audi Quattro concept would be launched resulting in the first mass-production four wheel drive car. British maker Jensen was the actual pioneer in this but the company went backrupt since its advanced car cost almost double that of a very nice Jaguar. Grandson of Mr. Porsche, Ferdinand Piech then head of development, was convinced by his engineers of the merits of a car with four wheel drive in optimising traction. Instead of using heavy transfer cases like existing SUV designs of the time, it would use what is known as the Ferguson layout using three differentials center, rear, and front. The early cars had lockable differentials rear and center.
It's these famous cars that dominated rally in the early 1980s and established Audi as the premier making of four wheel drive cars. These cars, although lacking in power, used their advantage in the highly traction variable world of rally racing over their two wheel brethren. The quattro's scored over 20 wins in the World Rally Championship and won the Manufacturers’ title twice in 1982 and 1984. As more and more manufacturers started using this system, the advantage slowly disappeared as other companies improved on this concept. There would never be another two wheel drive World Rally car again. In 1985, the named was shortened from "Audi NSU Auto Union AG" to "Audi AG."
Audi too was making progress in selling its cars in the US before watching it be destroyed by an infamous 60 Minutes segment. A woman had accused the car of "unintended acceleration" and the TV show had purposely sabotaged a car to do this. Audi's case was cleared by the courts in the end; it was the close pedal placement (made for heel-toe shifting) that caused the problem. The damage was done and the company would lose most of its overseas business for years to come.
In 1995, Audi introduced the Audi A4 and this car was a runaway success in the small-car luxury market. New Volkswagen CEO Ferdinand Piech had decreed that all the newest car offerings would pass his "finger test" where you could trace a finger down any gap and it would not fall through (Contrast this with GM). The combination of high grade materials and thoughtful design would establish Audi and consequently all of VAG to become the standard in interior build quality. Subsequent releases of the Audi A6, the stylish Audi TT would restablish the manufacturer as makers of premium cars and bring it to where it is today battling with old rival Mercedes-Benz and BMW. Audi restablished itself in motor racing by entering its new A4 design in several Touring Series in Australia, Europe, and South Africa dominating many of them. It was here where the phrase unfair advantage was coined where all-wheel-drive was banned through many of these races. By the turn of the century, Audi had started racing in LeMans and dominated this race yet again taking first, second, and third places in 2000 and 2002 and first and second in 2001.
By 2002, Audi would become a major player in the German luxury segment, though still playing third fiddle to the other two giants. Ex-BMW CEO Bernd Pischetsrieder would become the new CEO of VAG, now the largest automaker in Europe. In the wake of too many overlapping designs, Herr Pischetsrieder would decree separating the empire into two segments: conservative and aggressive. Volkswagen would head the first group that would include British Bentley, Italian Bugatti, and Czech company Skoda. The aggressive group would be headed by Audi and would include Italian Lamborghini and Spanish SEAT (Yes, believe it or not, all these companies are owned by VAG). With this new initiative, Audi is on a corporate mission to take on the master of the sport-luxury segment: BMW. This is where the company stands today.
Innovations made by Audi through the years include mid-engined cars in racing, wind tunnel testing, one of the first front wheel drive makers, first to make mass-production all-wheel-drive cars, among many others. Audi AG currently owns Lamborghini and Cosworth Technologies, the development arm. The racing arm of Cosworth is owned by Ford.
Sources:
http://www.audiurquattro.de/history/history.htm
http://www.lemans.org
http://www.bbc.co.uk/dna/h2g2/alabaster/A839090
http://www.audiworld.com - forums
http://www.wrc.com
http://www.automotivearticles.com/get.php?action=getarticle&articleid=34
http://www.s-cars.org
http://www.automuseum.com/audihistory.html
http://From.my.recesses.of my head - many many that I don't remember where they're from