The company traces its origins back to 1909 and August Horch. The first Audi automobile, the Audi Type A 10 / 22 hp Sport-Phaeton, was produced in 1910 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 the German Supreme Court finally determined that the Horch brand belonged to his former company.
August Horch was barred from using his own family name in his new car business, so he called a meeting with his best business friends, Paul and Franz Fikentscher from Zwickau. At the apartment of Franz Fikentscher they discussed how 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. He is quoted as saying, "Father –... wouldn't it be a good idea to call it audi instead of horch?". "Horch!" in German means "Hark!" or "hear", which is "Audi" in Latin. The idea was enthusiastically accepted by everyone attending the meeting.
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. The first six cylinder model, 4655 cc (4.7 L) appeared in 1924.
August Horch left the Audi company in 1920 for a high position at the ministry of transport, but he was still involved with Audi as a member of the board of trustees. In September 1921, Audi became the first German car manufacturer to present a production car, the Audi Type K, with left-handed drive. Left-hand drive spread and established dominance during the 1920s because it provided a better view of oncoming traffic, making overtaking safer.