Made in Germany: History of the German Car Industry


Germany is well-known for being a leader in making high-quality cars. They have a long history of making cars and are very good at it. German car brands are known for being very innovative, efficient, and reliable.

Every day, about ten new car inventions are created in Germany. They spend a lot of money researching and developing new ideas – about a third of their money goes towards this! There are over 89,000 people who work on making cars better in Germany.


This is not just good for German car companies – many other companies worldwide also want to use Germany’s skills and knowledge. They are opening up their research centres in Germany to learn from the experts and develop new ideas.

Have you ever wondered how Germany became known for producing high-quality cars? They have a long history of making great cars and pay close attention to the engineering details.

Many car companies worldwide have recognized this and are now setting up research and development centres in Germany to learn from their expertise. For example, Geely, a Chinese car company, recently opened their first research facility in Germany, hoping to combine German engineering with the growing Chinese market. As technology advances, car companies need to understand the history of automotive engineering to create new and better cars for the future.

History of the German Car Industry

1864 – the birth of the petrol-powered car

Cars have been around in some form or another for hundreds of years. They started with steam-powered versions back in the 1600s. However, when we think about cars today, we usually think of gasoline-powered ones.


The first gasoline-powered car was invented by a German inventor named Siegfried Marcus in 1864. Marcus was a technician and engineer who worked in Vienna. He designed his first car to look like a simple handcart but with wheels powered by an engine that used gasoline.

1864 - the birth of the petrol-powered car

The car had to be lifted off the ground to start the wheels. Marcus continued to work on his design and created several more gasoline-powered cars, each one better than the last. In 1888, Marcus designed a model much more like the cars we see on the road today.

It had a driver’s seat, a steering wheel, a clutch, and a brake. This car is now considered a Historic Mechanical Engineering Landmark by the American Society of Mechanical Engineers. You can still see it today in Vienna’s Technical Museum.

1885 – Benz goes into production

1885 - Benz goes into production

Marcus was the first person to create a gasoline-powered vehicle, but his designs were not very practical initially.

The first automobile successfully mass-produced was the Benz Patent-Motorwagen, designed by Karl Benz in Mannheim in 1885.

Karl Benz had previously worked on developing an engine that ran on gasoline, and he was eventually able to fit it into a three-wheeled coach in the 1880s.

1887 – Daimler sets up a rival to Benz

1887 - Daimler sets up a rival to Benz

Around the same time when the first Benz engine was designed, another inventor named Gottlieb Wilhelm Daimler was also working on a similar type of engine that runs on gasoline. He also built a car and started his own motor company, Daimler-Motoren-Gesellschaft, in 1887.

1888 – Benz proves the value of a car with the first long-distance drive

1888 - Benz proves the value of a car with the first long-distance drive

Benz patented his invention in 1886 but struggled to find investors to begin production. That is until one morning in August 1888 when his wife, Bertha Benz, took his Motorwagen on the world’s first long-distance trip – driving 104km (65 miles) from Mannheim to Pforzheim and back to visit her mother.

The concept was proved: the horseless carriage was capable of long-distance travel. Benz began production of his car.

In 2008, the “Bertha Benz Memorial Route” was officially approved as a route of the industrial heritage of humanity.

1899 – Sales growth births the automotive market

The popularity of cars and engines made by Benz & Cie. grew rapidly, and they needed to make more of them. So, they expanded their factory, and by 1899, they were the biggest car manufacturer in the country. They had 430 employees and made 572 cars that year.

1900 – Global market growth

Around 1900, cars became very popular and started being produced on a large scale in France and the United States. Countries like Belgium, Switzerland, Sweden, Denmark, Italy, and Australia also started developing their car industries. In Germany, they were producing about 900 cars per year at that time.

Early 1920s – Global challenges

In the early 1900s, German companies created great car designs that people loved. However, they couldn’t make enough of them to keep up with demand. This gave American companies, like Henry Ford’s car factory, a chance to step in and make their cars.

The American companies also liked the German car designs and saw potential. So, Ford opened a successful factory in Germany in 1925, and General Motors bought a German car company in 1929.

However, the car industry faced some tough times, especially during World War II, which hurt the German economy. Before the war, there were 86 car companies in Germany, but only 12 of them survived the Great Depression and the war.

1926 – Mercedes-Benz

1926 - Mercedes-Benz

Daimler and Benz were two separate car companies that faced financial difficulties during a tough time. To overcome these challenges, they joined forces in 1926 to create a new company called Daimler-Benz.

They decided to name all their cars Mercedes-Benz, which was the name of one of Daimler’s most popular models. This collaboration helped both companies grow stronger and succeed in the automobile industry.

1928 – BMW enter the automotive industry

1928 - BMW enter the automotive industry

Back in the day, two guys named Benz and Daimler were in a big competition with each other. Later, in 1928, a company that used to make engines for airplanes decided to start making cars too. This company was called Bayerische Motoren Werke, or BMW for short. They became a big player in the car industry, joining the rivalry between Benz and Daimler.


1948 – Porsche release their first sports car

1948 - Porsche release their first sports car

The Porsche company was founded in the 1930s by Ferdinand Porsche. It was originally a company that helped develop and advise on cars, but eventually started building them.

Ferdinand’s son, Ferry, made the company famous by creating Porsche’s first sports car, the 365. Ferry was a big motorsports fan, but he couldn’t find a car he wanted to buy. So, he decided to design his car.

The 365 car used parts from the Volkswagen Beetle, like the engine, transmission, and suspension. But it had a sleek body, a special engine that didn’t need water to cool down, and only had two seats, making it lighter.

The car won its first race at Innsbruck in 1948 and was later improved to make it even faster. Since the car was based on the Beetle, the engine was in the back of the vehicle, which is still a feature that Porsche cars are known for today.

1950 – The rise of the Beetle

1950 - The rise of the Beetle

In the early 20th century, Germany’s car industry was not as big as other countries’ industries, such as France, the USA, and the UK. They mostly sold cars in their own country. But in the 1940s, a car called the Volkswagen Beetle was made. Ferdinand Porsche designed it as a car for everyone.

This car became popular in the 1950s as a symbol of Germany’s revival after the war. When the car was first introduced to the United States in 1949, only two cars were sold in the first year.

But soon, a company called Volkswagen of America was started in 1955 to help sell the cars better. By 1955, one million VW Beetles had been made. The Beetle was made in Germany until 1978 and in Mexico and Brazil until 2003.

1950 – A hippie icon

Volkswagen (VW) achieved another great triumph with the launch of the Type 2 T1 camper van in 1950. The van was so popular that a new factory was built in Hannover six years later to meet the high demand. Along with the Beetle car, the VW camper van became a famous symbol of the 1960s.

1964 – The 911

1964 - The 911

The Porsche family, known for their automobiles, created a new car called the Porsche 911. This car was designed by Ferry Porsche’s son, Ferdinand Alexander Porsche, and his team as a successor to the 365.

The 911 was meant to be a sports car with a powerful engine and continue the company’s success in motor racing. It was originally named the 901, but it had to be renamed to 911 because another company had already been k the number 901.

Despite some challenges during its design, the 911 became the company’s most successful car, and many new versions were made over the years.

1970s – VW reinvents itself (and Audi)

1970s - VW reinvents itself (and Audi)

In the 1970s, people started losing interest in the Volkswagen Beetle, and the company faced some problems. But things turned around when Volkswagen merged with NSU Moterenwerke AG and Auto Union, which they had bought from Daimler Benz in 1964. They brought back the Audi brand, which had existed since the late 1800s.

The engineers at Audi had the skills to make Volkswagen’s cars better. They made changes like putting the engine in the front and making the cars use water to cool down instead of air. This helped Volkswagen launch new cars like the Passat in 1973, the Gold in 1974, and the Polo in 1975. This was a big moment for Volkswagen.

People started buying more Volkswagen and Audi cars worldwide during the 1970s. Audi had particular success with the Audi 100 and the Audi 80.

1980 – The Quattro

1980 - The Quattro

Audi, the famous car brand, had a lot of success during the 80s when it moved towards making sports cars. They launched two popular models – the Coupe and the Quattro. The Quattro was a high-performance car with four-wheel drive, which was great for driving in tough conditions.

The idea for this car came from one of Audi’s engineers, Jörg Bensinger, who noticed that military vehicles made by VW were better at handling difficult roads than smaller cars. The Audi Quattro became very popular and won many rally competitions in a row.

1985 – Ford relies on German engineering for its flagship model

In the 70s and 80s, many people preferred front-wheel drive hatchbacks or family saloons. Ford changed its car designs to fit these preferences, and in 1985, it replaced its popular Granada car with a new model called the Ford Scorpio.

To make this car, Ford chose to use their factory in Cologne instead of the German plants they had been using. At first, the Scorpio was only available as a hatchback. Still, it became very popular across Europe, so Ford started making other versions like a saloon and estate model in the 90s.

1990s – Acquisitions and expansion across the globe

During the 80s and 90s, the German car industry experienced much growth. They bought factories worldwide, expanding their market share and making German cars available in many countries like Mexico, Brazil, Turkey, and China.

Volkswagen, for example, established a factory in China to produce VW and Audi cars. They also bought SEAT and Skoda, which added more car models to their lineup. By the end of the 90s, Volkswagen had acquired luxury brands like Bentley, Bugatti, and Lamborghini.

BMW also bought the British Rover Group in 1994 but later sold it in 2000 while keeping only the Mini brand. Finally, Daimler-Benz merged with the American Chrysler Corporation in 1998.

1998 – A smart look for the new millennium

Daimler Benz, a car company with a long history of innovation and creativity, introduced a new type of car in 1998 called the Smart car. This car was designed to be small and stylish, perfect for driving in the city.

It was only 2.5 metres long and could fit two people. The Smart car was meant to be a car of the future, and new models would even be electric. In 2019, a company from China called Geely bought half of the Smart car brand.

2000s – 21st Century acquisitions

As we entered the new millennium, many big company takeovers were happeninghappened. One of the most famous was when BMW bought the company that makes Rolls-Royce cars in 2003. Then, in 2012, Volkswagen took over full control of Porsche.

Present day

Germany is one of the top countries in the world for making cars. They make almost six million cars yearly and sell over 5.5 million to other countries. Some of the most popular car brands in the world come from Germany, like Volkswagen, BMW, and Mercedes-Benz.

German engineers have been making cars for over 100 years, and they’re still coming up with new ideas to make better cars for the future. Even companies like Tesla and Geely are opening new factories in Germany because they know that German cars are very good.

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