<P> In 1964, Volkswagen acquired a 50% holding in the business, which included the new factory in Ingolstadt, the DKW and Audi brands along with the rights to the new engine design which had been funded by Daimler - Benz, who in return retained the dormant Horch trademark and the Düsseldorf factory which became a Mercedes - Benz van assembly plant . Eighteen months later, Volkswagen bought complete control of Ingolstadt, and by 1966 were using the spare capacity of the Ingolstadt plant to assemble an additional 60,000 Volkswagen Beetles per year . Two - stroke engines became less popular during the 1960s as customers were more attracted to the smoother four - stroke engines . In September 1965, the DKW F102 was fitted with a four - stroke engine and a facelift for the car's front and rear . Volkswagen dumped the DKW brand because of its associations with two - stroke technology, and having classified the model internally as the F103, sold it simply as the "Audi". Later developments of the model were named after their horsepower ratings and sold as the Audi 60, 75, 80, and Super 90, selling until 1972 . Initially, Volkswagen was hostile to the idea of Auto Union as a standalone entity producing its own models having acquired the company merely to boost its own production capacity through the Ingolstadt assembly plant--to the point where Volkswagen executives ordered that the Auto Union name and flags bearing the four rings were removed from the factory buildings . Then VW chief Heinz Nordhoff explicitly forbade Auto Union from any further product development . Fearing that the Volkswagen had no long term ambition for the Audi brand, Auto Union engineers under the leadership of Ludwig Kraus developed the first Audi 100 in secret, without Nordhoff's knowledge . When presented with a finished prototype, Nordhoff was so impressed he authorised the car for production, which when launched in 1968, went on to be a huge success . With this, the resurrection of the Audi brand was now complete, this being followed by the first generation Audi 80 in 1972, which would in turn provide a template for VW's new front - wheel - drive water - cooled range which debuted from the mid-1970s onward . </P> <P> In 1969, Auto Union merged with NSU, based in Neckarsulm, near Stuttgart . In the 1950s, NSU had been the world's largest manufacturer of motorcycles, but had moved on to produce small cars like the NSU Prinz, the TT and TTS versions of which are still popular as vintage race cars . NSU then focused on new rotary engines based on the ideas of Felix Wankel . In 1967, the new NSU Ro 80 was a car well ahead of its time in technical details such as aerodynamics, light weight, and safety . However, teething problems with the rotary engines put an end to the independence of NSU . The Neckarsulm plant is now used to produce the larger Audi models A6 and A8 . The Neckarsulm factory is also home of the "quattro GmbH" (from November 2016 "Audi Sport GmbH"), a subsidiary responsible for development and production of Audi high - performance models: the R8 and the "RS" model range . </P> <P> The new merged company was incorporated on 1 January 1969 and was known as Audi NSU Auto Union AG, with its headquarters at NSU's Neckarsulm plant, and saw the emergence of Audi as a separate brand for the first time since the pre-war era . Volkswagen introduced the Audi brand to the United States for the 1970 model year . That same year, the mid-sized car that NSU had been working on, the K70, originally intended to slot between the rear - engined Prinz models and the futuristic NSU Ro 80, was instead launched as a Volkswagen . </P> <P> After the launch of the Audi 100 of 1968, the Audi 80 / Fox (which formed the basis for the 1973 Volkswagen Passat) followed in 1972 and the Audi 50 (later rebadged as the Volkswagen Polo) in 1974 . The Audi 50 was a seminal design because it was the first incarnation of the Golf / Polo concept, one that led to a hugely successful world car . Ultimately, the Audi 80 and 100 (progenitors of the A4 and A6, respectively) became the company's biggest sellers, whilst little investment was made in the fading NSU range; the Prinz models were dropped in 1973 whilst the fatally flawed NSU Ro80 went out of production in 1977, spelling the effective end of the NSU brand . Production of the Audi 100 had been steadily moved from Ingolstadt to Neckarsulm as the 1970s had progressed, any by the appearance of the second generation C2 version in 1976, all production was now at the former NSU plant . Neckarsulm from that point onward would produce Audi's higher end models . </P>

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