Volkswagen had then consolidated the former Auto Union marques into a single company, re-using the Audi name to designate vehicles manufactured by the company rather than continuing to manufacture vehicles under the names of the various brands that had made up the original Auto Union.

Wanting to immediately begin making use of the technologies they had acquired in the Auto Union purchase, VW chose to participate in the competition to provide the next new German military vehicle by creating an evolution of the Munga jeep, which had been out of production for several years by this time.

Earlier that year, Freddy Kottulinsky and Gerd Löffelmann had won the Paris-Dakar Rally in an Audi-prepared Iltis.

The Iltis, as VW was now calling it, passed the German government's tests with ease, and was chosen over the equally competent but more expensive Mercedes-Benz G-Wagen.

[5] The interior is minimal, although the seats, from the contemporary Volkswagen Passat, were considered surprisingly comfortable by period observers.

[5] In the late 1970s, the French government decided it was time to replace their aging fleet of Hotchkiss Jeeps and like Germany, they too called out for offers.

No French company had a fitting vehicle on hand and designing one from the ground up would have been too expensive so they worked with the manufacturers that did have something to offer.