The automotive industry in Germany, is one of the largest employers in the country, with a labor force of over , working in the industry. Being home to the modern car , the German automobile industry is regarded as one of the most competitive and innovative in the world, [ 1 ] and has the third-highest car production in the world, [ 2 ] and fourth-highest total motor vehicle production.
With an annual output close to six million and a Motor-car pioneers Karl Benz who later went on to start Mercedes-Benz and Nicolaus Otto developed four-stroke internal combustion engines in the late s; Benz fitted his design to a coach in , which led to the modern-day motor car. By , Germany was producing about cars a year. BMW , though founded in , didn't start auto production until American economist Robert A. Brady extensively documented the rationalization movement that shaped German industry in the s, and although his general model of the movement applied to the automotive industry, the sector was in poor health in the later years of the Weimar Republic.
The slow development of the German automotive industry left the German market open for major American auto-manufacturers such as General Motors which took over German company Opel in and the Ford Motor Company which maintained the successful German subsidiary Ford-Werke , beginning in The collapse of the global economy during the Great Depression in the early s plunged Germany's auto industry into a severe crisis.
While eighty-six auto companies had existed in Germany during the s, barely twelve survived the depression, including Daimler-Benz , Opel and Ford 's factory in Cologne. Four of the country's major car manufacturers β Horch , Dampf Kraft Wagen DKW , Wanderer and Audi β formed a joint venture known as the Auto Union in , which would play a leading role in Germany's comeback from the depression. The turnabout for the German motor industry came about in the mids following the election of the Nazi Party to power in The Nazis instituted a policy known as Motorisierung [ de ] "motorization" , a transport policy which Adolf Hitler himself considered a key element of attempts to legitimise the Nazi government by raising the people's standard of living.
In addition to development and extensions of major highway schemes which saw the completion of the first Autobahn in , the Volkswagen project aimed to design and construct a robust but inexpensive "people's car", the product of which was the Volkswagen Beetle , presented in A new city known as Wolfsburg from grew up around the Volkswagen factory to house its huge workforce, [ 4 ] but Volkswagen production switched to military output in By the end of World War II , most of the auto factories had been destroyed or badly damaged.
