1988 AUDI ad “Vorsprung durch technik”.

The company traces its origins back to 1899 and August Horch. The first Horch automobile was produced in 1901 in Zwickau. In 1909, Horch was forced out of the company he had founded. He then started a new company in Zwickau and continued using the Horch brand. His former partners sued him for trademark infringement and a German court determined that the Horch brand belonged to his former company. August Horch was forced to refrain from using his own family name in his new car business. Horch immediately called a meeting at the apartment of Franz Fikentscher to come up with a new name for his company. During this meeting Franz’s son was quietly studying Latin in a corner of the room. Several times he looked like he was on the verge of saying something but would just swallow his words and continue working, until he finally blurted out, “Father – audiatur et altera pars… wouldn’t it be a good idea to call it audi instead of horch?”. “Horch!” in German means “Hark!” or “listen”, which is “Audi” in Latin (compare audible). The idea was enthusiastically accepted by everyone attending the meeting.  It is sometimes (incorrectly) believed that AUDI is a backronym (a reversed acronym) which stands for “Auto Union Deutschland Ingolstadt”.

Audi started with a 2,612 cc (2.6 litre) four cylinder model followed by a 3564 cc (3.6 L) model, as well as 4680 cc (4.7 L) and 5720 cc (5.7L) models. These cars were successful even in sporting events. August Horch left the Audi company in 1920. The first six cylinder model, 4655 cc (4.7 L) appeared in 1924. In 1928, the company was acquired by Jørgen Rasmussen, owner of DKW. In the same year, Rasmussen bought the remains of the US automobile manufacturer, Rickenbacker, including the manufacturing equipment for eight cylinder engines. These engines were used in Audi Zwickau and Audi Dresden models that were launched in 1929. At the same time, six cylinder and four cylinder (licensed from Peugeot) models were manufactured. Audi cars of that era were luxurious cars equipped with special bodywork.

Info taken from Wikipedia