Karl Abarth was born in Austria in 1908, but his family moved to Italy just after the First World War.  He became a serious motorcycle racer in the late 1920s and developed into a world-class rider who was five times Champion of Europe.  Since Italy was in need of sporting heroes to match German achievements, he was more or less adopted by the Fascists, who induced him to stay in Italy.

In October 1939, Abarth was severely injured in a race in Yugoslavia and when he was released from hospital he stayed in the country where he worked on engines.  At the end of the War he turned to his old friend, Ferry Porsche, who employed him in his design studio.  Abarth thus became involved with the Cisitalia project and when Cisitalia's patron, Piero Dusio, left Italy in 1949 Guido Scagliarini (a Cisitalia driver) persuaded his father to set up Abarth in business.

At first he continued the Cisitalia competition programme, and then began making dual-purpose Tipo 204 sports-racing cars under his own name.  These were not immediately successful, although Nuvolari won the last competition of his career, a hill climb, in an Abarth.  From the beginning Scuderia Abarth made tuning accessories, mainly for Fiat engines, but Abarth silencers became available for many cars.