The first car manufactured by the August Horch & Cie had a friction clutch and shaft driven rear wheels – technology that no other car possessed at the time. In 1903 Horch also launched the first four cylinder car and then in 1907 a six-cylinder one. Horch cars were considered technologically far superior to even Benz and Mercedes.
The company was based in Cologne in 1901. However due to unfavorable economic conditions, it had to shift to Reichanbach in the next year itself, and then to Zwickau 2 years later. Further financial problems forced August to convert the company into a joint stock one, presumably to raise finances. According to Horch this was the biggest mistake he made. In 1909 the company sales dipped and Horch was asked to step down from the post of president by his shareholders.