Neckar

NSU Motorenwerke (subsequently NSU Werke) AG sold its then recently completed Heilbronn car factory (near the river Neckar) in 1929 to Fiat for one Million Marks, following financial problems resulting from the economic crisis. The deal resulted from an initiative by NSU's bankers, Dresdner Bank.

Two separate NSU businesses

The 1929 deal left two businesses producing petrol driven vehicles with similar names located barely 7 kilometers (4 miles) apart: the two were frequently confused with one other. "NSU Automobil-AG" was a subsidiary of Fiat, manufacturing Fiat passenger cars carrying a "NSU-Fiat" badge and located in Heilbronn, while NSU Werke AG in nearby Neckarsulm produced motor-bikes, becoming during the 1950s one of the largest motor-bike manufacturers in the world.

NSU-Fiat

Fiat's German subsidiary started to produce Fiat Topolinos and Balillas models under license in the Heilbronn factory under the brand "NSU-Fiat". (The same Fiat-designed models were also produced under license in Nanterre, France, by SIMCA-Fiat the cars subsequently becoming known simply as "Simcas".)

The Heilbronn plant had been built in 1926 by NSU, then a motor bike manufacturer, in order to break into the passenger car market, but the project had failed and by 1929 NSU had no ambitions to produce passenger cars, and therefore no reason to object when Fiat, having bought the plant, used it to manufacture cars badged as NSU-Fiats. In 1929 friendly collaboration between NSU and the nearby Fiat subsidiary was agreed, with NSU supplying parts for the Heilbronn built Fiat models. A year later, however, relations had cooled as Fiat preferred to supply parts to its Heilbronn factory from its own Turin plant beyond the Alps, and also used the Heilbronn site as a bridgehead to facilitate the importation to Germany of fully assembled new cars from Italy.

Post war sporting success for NSU

Success by NSU Werke AG in motor-bike racing in the decade after 1945 greatly enhanced the appeal and therefore the value, especially in Germany, of the "NSU" name. With the "NSU" name more frequently in the public eye, confusion between "NSU-Fiat" and "NSU Werke" became more frequent among the general public which also affected business professionals with whom the businesses had dealings. The 1950s found NSU Werke's General Director, Dr. von Heydekampf, complaining that customers were being deceived ("grobe Kundentäuschung") because Fiat Germany were using the NSU-Fiat name to exploit the glory of the racing successes and speed records of the NSU motorbikes.

Re-entry into automobiles

In 1955 it was reported that the motorbike manufacturer NSU Werke were planning to produce a passenger car in the "approximately 400cc" class and proposed to badge the little car simply as an "NSU". This seemed likely to create even more confusion in the market place affecting Fiat's smaller "NSU-Fiat"s based on the Fiat 600, already produced in Turin since 1955 and scheduled for imminent launch as a Heilbronn produced model (with the still smaller Fiat 500 already in the development pipeline). The Heilbronn built Fiat 600 was duly launched in 1956, but because of the dispute it was badged not as an NSU-Fiat but as the "Jagst" (shortly thereafter lengthened to "Neckar-Jagst") while one class up, the new Heilbronn built Fiat 1100 also introduced in 1956 was advertised as the "Neckar". The NSU offering, when it appeared on the market in 1958 as the NSU Prinz would indeed compete in the same market segment as the baby Fiats.

NSU brand dispute

Acrimony had mounted, involving robust exchanges of lawyers' letters, and legal hearings ensued. Arguments centred on what had been agreed about rights to the "NSU" name and, in particular, whether an arguably informal letter dated 5 January 1929 on the subject had long-standing contractual force. The judge decided that the 1929 letter could not have the contractual force necessary to bind the parties over use of the "NSU" name, because of a danger that its effect, if valid, would be to damage marketplace competition and thereby run counter to the public interest. The Fiat licensee therefore felt obliged, in 1957, to rebrand all its Heilbronn assembled cars: NSU-Fiat badged cars became Neckars.

Fiat-designed models branded as Neckars

By the late 1950s, Neckar was producing no more than 25,000 vehicles a year. The lineup consisted of the Fiat 500 (Neckar Weinsberg), 600 (Neckar Jagst), and 1100 (Neckar Europa), all slightly modified and typically more luxurious and sporty than the Fiats produced in Turin.