The Versailles Treaty of 1919 banned Germany from building military aircraft but this only encouraged the development of civilian sporting aircraft. One of the many small companies building experimental sports aircraft was Erla of Leipzig. Erla's principal and designer, Franz Xaver Mehr, used a variety of small engines to power their lightweight planes. Director of DKW, Jorge Rasmussen, had wide ranging interests, and saw an opportunity to invest in the aircraft industry. He formed a joint venture with Mehr and brought Erla within the J S Rasmussen Group. DKW supplied Erla with their new two-cylinder water cooled 600cc two-stroke engine that was used in the DKW F1 and F2 cars.
