Hitler became chancellor in February 1933 and declared at the Berlin auto show his intentions to get Germany motoring. Then a year later at the 1934 show he stated that his government would support the development of a 'peoples car'. Impressed by Porsche's design capabilities, Hitler delivered him the design brief of a car that could carry two adults and three children at a speed of 60mph with at least 33 mpg. The price was to be 1000 Reichmarks, not much more than a motorcycle at the time. Ferdinand Porsche was not convinced that a car could be made so cheaply, but considered the project a challenge, and took it on. The project car was named the Type 60, and due to time constraints Porsche based many components on the earlier NSU. The engine was an air-cooled flat-four also based on the NSU design.

By late 1935 the first prototypes were on the autobahns, the V1 saloon and a convertible V2, these cars had aluminium bodies mounted over traditional wooden frameworks. In 1936 steel bodies mounted over all-steel floorpans were used, powered by a 984cc, 22bhp engine that could reach a top speed of around 65 mph. Another 30 prototypes were then made by Daimler-Benz who were not keen to make such a cheap car as they thought it would damage their high-class reputation. The development program was then transferred to the Nazi German Labour Front who would use German workers contributions to pay for a new factory. The Daimler-Benz built cars were tested at an SS barracks near Stuttgart and driven in shifts by 200 soldiers, until any minor problems were corrected. During this time Dr. Porsche visited the US to view some of the production methods used there, and recruited some German immigrant engineers who had worked in these factories.

In 1937, the coachbuilders Reutter, based in Stuttgart, were asked to make 30 vehicles which would eventually be shipped to various festivals and fairs to entice the German public to buy. There were Saloons, sunroofs and convertible models. Hitler also introduced a savings scheme where the public could collect stamps that would eventually pay for the car.

On the 26 May 1938, Hitler ceremoniously laid the cornerstone of the new factory, a huge event witnessed by an estimated 70,000 people and 150 reporters, all controlled by the Nazi propaganda machine. It was here that Hitler declared that the model would be known as the 'KdF-Wagen' or 'Strength through joy' wagen and the surrounding town that was built to support the factory would be known as the 'KdF-Stadt', production was to start in September 1939 - this turned out to be the same month that World War Two was declared, and none of the thousands who had collected their stamps ever received their beetle.

As the War gathered pace, the KdF-Wagen was put on hold and production changed to military vehicles. The 'Kubelwagen' used the tried and tested and very successful chassis and air-cooled engine developed for the peoples car. In 1942 the Kubelwagen was joined by the Schwimmwagen - a four wheel drive vehicle capable of driving on land and in water. By 1943 over 12,000 prisoners of war were working at the factory, which was by now mostly repairing aircraft.

For most of the war, the KdF plant had managed to escape heavy bombing, the new town was not on many allied maps. Near the end of the war the factory was used to manufacture the V1 'buzz bomb'. This bomb was an unmanned rocket that had the ability to reach Britain from Germany, and the factory became a main target for the allied bombing raids. An estimated 2000 V1 bombs hit London before several daylight bombing raids by the US left the factory in ruins.

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