At the International Automobile and Motorcycle Exhibition in Berlin in March 1934, automobile companies such as Opel, Ford, Adler, Stower, and the Ludwigsburg-based Standard-Furzeugfabrik presented various versions of the “German People's Car” in their “Superior” models. Ignoring all of this, Hitler himself, in his opening speech on March 7, 1934, supported the production of a “low-cost car” that he said would bring “millions of new buyers” to the German automobile industry. The official selling price was stated as 990 Reichsmarks.
This put the ball squarely in the hands of the German Association of the Automobile Industry (RDA), which decided in May 1934 to develop a “Deutsche People's Car” as a “joint project” of the private automobile industry. The RDA signed a contract on 22 June 1934, commissioning the engineering design to Ferdinand Porsche's office. There were serious doubts among the automobile companies about the economic feasibility of the project, given the target price of 990 Reichsmarks. By including independent designers in the process, the RDA contracted for the development of a prototype within a year, outsourcing any outstanding technical issues to an outside company.
Porsche KG began work at its factory in Zuffenhausen near Stuttgart and presented the first prototype to the RDA's technical committee on 3 July 1935. Other prototypes followed, including a convertible. Porsche engineers overcame countless technical difficulties; the body began to take shape, and the chassis and engine were developed closer and closer to the specifications. On 12 October 1936, the three cars of the V3 series were each subjected to 50,000 kilometres of testing, the results of which were presented to the RDA in January 1937 in a 96-page final report. Although the vehicle's principle validity had been proven, a shortage of foreign currency and a shortage of raw materials made the prospect of profitable mass production seem unlikely. The problem of financing also remained unresolved. Despite the basic technical problems being solved, the “people's car” project was in crisis due to economic factors.
