Volkswagen literally means "people car". True to its name, Volkswagen produced the best-selling car of all time, the Beetle. Volkswagen's history goes back to Ferdinand Porsche's vision of producing a vehicle that every working man can afford. This idea was not a new one but previous attempts to realize it had failed.

Ferdinand Porsche had an impeccable reputation as an automobile engineer, heading his own consultation firm and previously serving as chief designer of Lohner, Austro-Daimler, Mercedes, Daimler-Benz and Steyr. When Hitler expressed his desire to produce a car that would serve the needs of the average German, Porsche seized the opportunity and presented his plans to Hitler who greenlighted the project, but with several requirements: the car should be a five-seater, have a cruising speed of 100 kmh, get 40 miles to the gallon, be air-cooled, and be priced below 1000 Marks. Ferdinand Porsche accepted the challenge even though he was sure that a car could not be made that cheaply: the cost of Ford's mass produced models at the time was roughly the equivalent of 2,600 Marks. Fortunately, Porsche had already designed many of the required VW parts in one of his earlier models with a similar name - the Volksauto. Porsche assigned the name Type 60 to his prototype but it was changed to V1 and a convertible version Hitler requested was named V2. By 1935, 3 prototypes were created and Daimler-Benz were ordered to build another 30 to complete the testing. The car now sported the unique streamlined look that would become famous around the world.

The Beetle or VW Type 1 was ready for production in 1939 but World War 2 intervened and the car was retooled for the far effort. Porsche revised some of the VW parts, enlarging the engine and crafting a four-seater body for the wartime model Type 81. The VW Schwimmwagen was an amphibious vehicle used extensively by the German army. After the war, Volkswagen's first customer would ironically be the British who needed light transport and ordered 20,000 units. Volkswagen sold only 2 cars when it started exporting to America but clever advertising campaigns popularized the brand immensely. In 1973, sale of the Volkswagen Beetle exceeded the 16 millionth marks replacing the Model T as the best-selling car in the world. It was also named fourth most influential car of the 20th century by the Global Automotive Elections Foundation. Later versions of the Type 1 sold poorly and Volkswagen purchased Audi/Auto Union to help the company create a new breed of VW vehicles. Polo, Golf, and Passat succeeded the VW Beetle and represented a break from the company's one-brand policy.

To keep the company competitive, Group CEO Bernd Pischetsrieder and brand CEO Wolfgang Bernhard unleashed a brand offensive that started in 2002, introducing new models in its lineup like the sixth-generation Passat and the fifth-generation Jetta. Martin Winterkorn will become VW Group CEO on January 1, 2007. He was responsible for bringing the Audi brand to the spotlight and making it a credible competitor to other luxury brands like BMW and Mercedes.

Volkswagen is now the world's fourth largest car manufacturer.