In 1962 DKW released their new model, the F102. After the disappointments of the F11 and F12, the F102 was a welcome return to form. A large contemporary styled family sedan, the car was quite a step away from DKW's small car heritage. It was powered by a new 1176cc, 60 horsepower, three-cylinder, two-stroke motor. DKW sales, which had been declining for several years, began to pick up.
The release of the F102 coincided with significant changes at Auto-Union. In 1964 Mercedes-Benz, which had an 87% share in the company, sold its shareholding to Volkswagen. Mercedes-Benz had largely been a 'hands off' shareholder, rarely interfering with Auto-Union except to divest the company of DKWs loss making motorcycle arm to Zweirad Union. Volkswagen however was keen to make changes at Auto-Union.
Plans were already well underway on the F102's successor, including trials of a new 1300cc two-stroke engine. Two-stroke auto engines offered a number of natural advantages. Being simple in design with few moving parts, they were cheap to build and easy to maintain, required little maintenance, delivered high power for their size and had low fuel consumption. However, these advantages were progressively eroded as the displacement of the engines increased. The F102's 1176cc engine had skated along the limits of two-stoke efficiency. The 1300cc engine however did not. To deliver the anticipated horsepower increase, combustive efficiency was compromised. This could be compensated for with fuel injection, but that increased fuel consumption. The natural limits of the two-stroke had been reached.
Volkswagen were not prepared to invest in further two-stroke research so they replaced DKW's two-stroke with a Mercedes-Benz 1700cc four cylinder four-stroke engine. Subtle changes were also made in the styling, such as introducing rectangular headlights.
Although the car was basically a DKW with a four-stroke engine, Volkswagen opted to make a complete break with the past. The DKW name was dropped and the Audi brand, which had not manufactured a car since 1938 was resurrected. The brochure below introducing the new car, skips over DKW's post-war years entirely, never mentioning DKW even once and presents the new Audi F103 fully formed, devoid of its true origins ....
This article has been translated into Portuguese and republished on a Brazilian DKW website http://www.dkwcandango.com.br/09%20Artigos%20Tecnicos/09_Projeto_F103.htm