The Type-C was a third evolution of Auto Union’s racecar. It primarily competed with Mercedes-Benz but also raced against Alfa Romeo’s 12C-36, the Maserati V8RI and Bugatti 59/50. Type-Cs won six victories in 1936 and made Bernt Rosermeyer world champion.

Ferdinand Porsche designed the Type-C and championed his mid-engine design first used on the 1923 Benz Tropfenwagen. Weight distribution was his primary motivation in this choice. The driver could sit lower with no drive shaft and the front-to-rear weight distribution was more even. Furthermore, the fuel tank was also located centrally for balance. Despite these efforts, 60% of the weight still remained on the rear wheels.

What made the car unbalanced was its heavy engine and comparably small chassis and body. The design team engineered the largest possible engine within the 750 kg weight limit. This resulted in the largest capacity engine to compete during 1936 and 1937.