Auto Union was a well-established German car manufacturer before World War II with marques like Horch, Audi and DKW. Think German GM. The War changed all that when most of the Auto Union factories were destroyed. Still Auto Union managed to survive, but only one of the old Auto Union marques was revived: DKW - the brand for the masses (motorcycles and affordable lower middle class cars). Audi obviously came back from the brink as well - to be Auto Union's only surviving member.
As Germany struggled to get the economy up and going again, much effort was taken to bring Western Germany back to the top of industrialization. The economy and industry of the United States formed the example of which to strive for. US American design of the 1950s was transmitted by music and movies into Western Europe and was regarded as an icon for financial success, especially in Western-Germany which was still in search of a new identity (as the one that was just destroyed obviously did not want to be remembered).
Auto Union, like many car companies post war, found restarting to be hard. This left little room for developing new models and technology so post-war DKW cars were quite similar in construction and design to the pre-war models. In order to survive DKW needed something that at least appeared up to date. To revive the brand image a fresh looking, attractive and youthful car was developed: the 1000Sp.
The 1000Sp basically adobted US American space age style complete with tailfins but downsized to European proportions. To be more specific, they stole the look of the 1957 Ford Thunderbird. Underneath the dazzle lied Trabant-esque 2-stroke technology. It's not fugly in itself, but the idea behind it - a kind of automotive plagarism - is.
