In spring 1933 the Porsche Engineering Office was requested by Auto Union in Saxony to develop a 16-cylinder racing car in accordance with the rules of the new 750-kg racing formula. Immediately after concluding the contract, the Porsche team under the guidance of Senior Engineer Karl Rabe started work on the mid-engined Auto Union P racing car (P for Porsche). The first engine was tested on the dynamometer in late 1933, initially presenting various problems. One of these challenges was the crankshaft, which permanently turned blue at the front. Ferry Porsche attributed this phenomenon to the different thermal elongation of the steel crankshaft and the electron metal engine block, with the assumption that longitudinal clearance in the engine was insufficient. "The engineers listened to me politely, but they were not convinced I was right", said Ferry Porsche, rather irritated at the time.
"So without any further ado, I carried out a test myself, took the crankshaft and the crankcase and went to the case-hardening shop where we had furnaces for heating up the two components." With the subsequent measurements confirming his theory, longitudinal tolerance was increased accordingly.
The first driving tests with the Grand Prix car were carried out in early 1934, enabling Ferry Porsche to prove his outstanding talent as a racing driver so impressively that his father Ferdinand feared his son might decide to go into motor racing. So emphasising Ferry's most promising future as an automotive constructor and engineer, he instructed his son in very clear and strict terms not to drive a racing car again: "I have lots of racing drivers, but only one son!" Acknowledging his father's request, Ferry Porsche no longer took the wheel of a racing car but instead lived out his sporting ambitions in rallies with a Wanderer touring car, competing in the 2,000-Kilometre Rally through Germany directly against top drivers of the day such as Bernd Rosemeyer, Hans Stuck and Prinz zu Leinigen.
"In the first leg of the Rally leading through the Black Forest I was even faster than Rosemeyer", said Ferry Porsche triumphantly many years later.
1934: the Volkswagen Project
The legendary 16-cylinder racing car was only the beginning leading on to a further outstanding achievement by Porsche in 1934: the Volkswagen. On 17 January Ferdinand Porsche presented his "Study for the Construction of a German People's Car" as his concept of a robust and low-cost compact car for the "regular" driver. Receiving the final go-ahead for this project was however a difficult and laborious challenge, with the small Porsche Engineering Office applying for an assignment feared and rejected by the large and well-established German car makers as a possible source of competition. Subject to political pressure, the Reichsverband der Automobilindustrie (RDA), the Association of the Automotive Industry of the German Reich, nevertheless concluded a contract with Porsche on 22 July 1934 for the construction of a Volkswagen prototype.
Two requirements made this challenge particularly demanding: The projected purchase price of less than 1,000 reichsmarks and the deadline for completing the prototype in just ten months. No surprise, therefore, that Ferry Porsche later described the development of the Auto Union racing car compared with the Volkswagen as "child's play", since the engineers working on the Volkswagen were required from the start to act not only as constructors, but also as very shrewd businessmen. The objective was to maintain a sales price of 999 reichsmarks for the Volkswagen in the market.