<PAGE>   1
      As filed with the Securities and Exchange Commission on May 29, 1998
                                                    Registration No. 333-___

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  ------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                                  ------------
                                   SAUER INC.
             (Exact name of Registrant as specified in its charter)
                                  ------------
Delaware                                                            36-3482074
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                              2800 EAST 13TH STREET
                                AMES, IOWA 50010
                                 (515) 239-6000

       (Address, including zip code, and telephone number, including area
               code, of Registrant's principal executive offices)

                                  ------------

                     SAUER INC. NON-EMPLOYEE DIRECTOR STOCK
                        OPTION AND RESTRICTED STOCK PLAN

                    SAUER INC. 1998 LONG-TERM INCENTIVE PLAN
                            (Full Title of the Plans)
                                  ------------
                               KENNETH D. MCCUSKEY
                             TREASURER AND SECRETARY
                                   SAUER INC.
                              2800 EAST 13TH STREET
                                AMES, IOWA 50010
                                 (515) 239-6364
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                                  ------------

                                    COPY TO:
                            JAMES W. KAPP, JR., ESQ.
                         SPENCER FANE BRITT & BROWNE LLP
                         1000 WALNUT STREET, SUITE 1400
                           KANSAS CITY, MISSOURI 64106
                                 (816) 292-8141
                                  ------------
                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
                                                         PROPOSED MAXIMUM        PROPOSED MAXIMUM
     TITLE OF SECURITIES             AMOUNT               OFFERING PRICE             AGGREGATE                   AMOUNT OF
       TO BE REGISTERED      TO BE REGISTERED(1)(2)        PER SHARE(3)          OFFERING PRICE(3)           REGISTRATION FEE
<S>                          <C>                           <C>                   <C>                          <C>
Common Stock, $.01 par              2,650,000              $16.6875              $44,221,875.00                $13,045.46
value per share
</TABLE>

(1)      250,000 shares of Sauer Inc. Common Stock, par value $.01 per share
         (the "Shares"), are being registered pursuant to the Sauer Inc. Non-
         Employee Director Stock Option and Restricted Stock Plan and 2,400,000
         Shares are being registered pursuant to the Sauer Inc. 1998 Long-Term
         Incentive Plan

(2)      This Registration Statement also covers such additional shares of
         Common Stock as may be issuable pursuant to antidilution provisions.

(3)      Estimated solely for the purpose of determining the registration fee
         pursuant to Rule 457(c), based on the average of the high and low
         prices per share of the Shares as reported by the New York Stock
         Exchange on May 26, 1998.



<PAGE>   2
                                     PART II

                           INFORMATION REQUIRED IN THE
                             REGISTRATION STATEMENT

ITEM 3.           INCORPORATION OF DOCUMENTS BY REFERENCE.

         Sauer Inc. (the "Registrant") hereby incorporates by reference into
this Registration Statement the following documents filed by it with the
Commission:

         (a)      The Registrant's final prospectus dated May 11, 1998, as filed
                  with the Commission pursuant to Rule 424(b) of the Securities
                  Act, which contains audited financials for the fiscal year
                  ended December 31, 1997;

         (b)      The description of the Registrant's Common Stock, par value
                  $.01 per share (the "Common Stock"), contained in the
                  Registrant's Registration Statement on Form 8-A filed with the
                  Commission on May 7, 1998.

         In addition, all documents and reports filed by the Registrant
subsequent to the date hereof pursuant to Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act"), prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents or reports.

         Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.

ITEM 4.           DESCRIPTION OF SECURITIES.

         Not applicable. (The Common Stock is registered under Section 12 of the
Exchange Act.)

ITEM 5.           INTERESTS OF NAMED EXPERTS AND COUNSEL.

         Not applicable.

ITEM 6.           INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL")
permits a provision in the certificate of incorporation of each corporation
organized thereunder, eliminating or limiting, with certain exceptions, the
personal liability of a director to the corporation or its 
<PAGE>   3
stockholders for monetary damages for certain breaches of fiduciary duty as a
director. The Certificate of Incorporation of the Company eliminates the
personal liability of directors to the fullest extent permitted by Delaware law.

         Section 145 of the DGCL ("Section 145"), in summary, empowers a
Delaware corporation, within certain limitations, to indemnify its officers,
directors, employees and agents against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by them in connection with any suit or proceeding other than by or on
behalf of the corporation, if they acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to a criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful.

         With respect to a actions by or on behalf of the corporation, Section
145 permits a corporation to indemnify its officers, directors, employees and
agents against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit,
provided such person meets the standard of conduct described in the preceding
paragraph, except that no indemnification is permitted in respect of any claim
where such person has been found liable to the corporation, unless the Court of
Chancery or the court in which such action or suit was brought approves such
indemnification and determines that such person is fairly and reasonably
entitled to be indemnified.

         Article Ninth of the Restated Certificate of Incorporation of the
Company provides for the indemnification of officers and directors and certain
other parties of the Company to the fullest extent permitted by law. In
addition, the Company has entered into Indemnification Agreements with its
directors and certain officers pursuant to which the Company generally is
obligated to indemnify its directors and officers to the maximum extent
permitted by law. The Company also maintains directors and officers liability
insurance.

ITEM 7.           EXEMPTION FROM REGISTRATION CLAIMED.

         Not applicable.

ITEM 8.           EXHIBITS.

         Reference is made to the Exhibit Index filed herewith.

ITEM 9.           UNDERTAKINGS.

         (a)      The undersigned registrant hereby undertakes:

                  (1)      To file, during any period in which offers or sales
                           are being made, a post-effective amendment to this
                           registration statement:

                           (i)      To include any prospectus required by
                                    Section 10(a)(3) of the Securities Act of
                                    1933;
<PAGE>   4

                           (ii)     To reflect in the prospectus any facts or
                                    events arising after the effective date of
                                    the registration statement (or the most
                                    recent post-effective amendment thereof)
                                    which, individually or in the aggregate,
                                    represent a fundamental change in the
                                    information set forth in the registration
                                    statement. Notwithstanding the foregoing,
                                    any increase or decrease in volume of
                                    securities offered (if the total dollar
                                    value of securities offered would not exceed
                                    that which was registered) and any deviation
                                    from the low or high end of the estimated
                                    maximum offering range may be reflected in
                                    the form of prospectus filed with the
                                    Commission pursuant to Rule 424(b) if, in
                                    the aggregate, the changes in volume and
                                    price represent no more than a 20% change in
                                    the maximum aggregate offering price set
                                    forth in the "Calculation of Registration
                                    Fee" table in the effective registration
                                    statement; and

                           (iii)    To include any material information with
                                    respect to the plan of distribution not
                                    previously disclosed in the registration
                                    statement or any material change to such
                                    information in the registration statement;

                           provided, however, that paragraphs (a)(1)(i) and
                           (a)(1)(ii) do not apply if the registration statement
                           is on Form S-3 or Form S-8, and the information
                           required to be included in a post-effective amendment
                           by those paragraphs is contained in periodic reports
                           filed by the registrant pursuant to Section 13 or
                           Section 15(d) of the Securities Exchange Act of 1934
                           that are incorporated by reference in the
                           registration statement.

                  (2)      That, for the purpose of determining any liability
                           under the Securities Act of 1933, each such
                           post-effective amendment shall be deemed to be a new
                           registration statement relating to the securities
                           offered therein, and the offering of such securities
                           at that time shall be deemed to be the initial bona
                           fide offering thereof.

                  (3)      To remove from registration by means of a
                           post-effective amendment any of the securities being
                           registered which remain unsold at the termination of
                           the offering.

         (b)      The undersigned registrant hereby undertakes that, for
                  purposes of determining any liability under the Securities Act
                  of 1933, each filing of the registrant's annual report
                  pursuant to Section 13(a) or 15(d) of the Securities Exchange
                  Act of 1934 (and, where applicable, each filing of an employee
                  benefit plan's annual report pursuant to Section 15(d) of the
                  Securities Exchange Act of 1934) that is incorporated by
                  reference in the registration statement shall be deemed to be
                  a new registration statement relating to the securities
                  offered therein, and the offering of such securities at that
                  time shall be deemed to be the initial bona fide offering
                  thereof.
<PAGE>   5
         (c)      Insofar as indemnification for liabilities arising under the
                  Securities Act of 1933 may be permitted to directors,
                  officers, and controlling persons of the registrant pursuant
                  to the foregoing provisions, or otherwise, the registrant has
                  been advised that in the opinion of the Securities and
                  Exchange Commission such indemnification is against public
                  policy as expressed in the Act and is, therefore,
                  unenforceable. In the event that a claim for indemnification
                  against such liabilities (other than the payment by the
                  registrant of expenses incurred or paid by a director, officer
                  or controlling person of the registrant in the successful
                  defense of any action, suit or proceeding) is asserted by such
                  director, officer or controlling person in connection with the
                  securities being registered, the registrant will, unless in
                  the opinion of its counsel the matter has been settled by
                  controlling precedent, submit to a court of appropriate
                  jurisdiction the question whether such indemnification by it
                  is against public policy as expressed in the Act and will be
                  governed by the final adjudication of such issue.

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Ames, State of Iowa, on the 29th day of May, 1998.

                                             SAUER INC.


                                             By: /s/ Kenneth D. McCuskey
                                                 ------------------------------
                                             Name:  Kenneth D. McCuskey
                                             Title:  Treasurer and Secretary


<PAGE>   6
                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Tonio P. Barlage and
Kenneth D. McCuskey, and each of them, as his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities (until revoked in writing),
to sign any and all amendments, including post-effective amendments and
supplements, to this Registration Statement on Form S-8, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or his or their substitute may
lawfully do or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Signatures                         Title                         Date
--------------------------------------------------------------------------------


/s/ Klaus H. Murmann
-------------------------          Chairman and Chief           5/29/98
Klaus H. Murmann                   Executive Officer and         
                                   Director (Principal           
                                   Executive Officer)            
/s/ Tonio P. Barlage     
-------------------------          President and Chief          5/25/98   
Tonio P. Barlage                   Operating Officer and         
                                   Director                      
/s/ David L. Pfeifle 
-------------------------          Executive Vice President     5/28/98 
David L. Pfeifle                   and Director                  
                                                                 
/s/ Nicola Keim                                                 5/27/98
-------------------------          Director                      
Nicola Keim                                                      
                                                                 
/s/ Johannes F. Kirchhoff     
-------------------------          Director                     5/29/98 
Johannes F. Kirchhoff                                            
                                                                 
/s/ Sven Murmann 
-------------------------          Director                     5/28/98 
Sven Murmann                                                     
                                                                 
<PAGE>   7

/s/ Agustin A. Ramirez 
------------------------            Director                    5/26/98
Agustin A. Ramirez

/s/ Richard M. Schilling
------------------------            Director                    5/28/98
Richard M. Schilling

/s/ Kenneth D. McCuskey  
------------------------            Treasurer and Secretary     5/29/98
Kenneth D. McCuskey                 (Principal Accounting
                                    Officer)


<PAGE>   8
                                   SAUER INC.

                                  EXHIBIT INDEX

Exhibit
Number                              Description

4.1      Restated Certificate of Incorporation of the Registrant (incorporated
         herein by reference to Exhibit 3.1(c) to Amendment No. 1 to the
         Registrant's Registration Statement on Form S-1 (File No. 333-48299)
         filed with the Commission on April 23, 1998).

4.2      Restated By-laws of the Registrant (incorporated herein by reference to
         Exhibit 3.2 to the Registrant's Registration Statement on Form S-1
         (File No. 333-48299) filed with the Commission on March 20, 1998).

4.3      Form of Certificate of the Common Stock of the Registrant (incorporated
         herein by reference to Exhibit 4.1 to Amendment No. 1 to the
         Registrant's Registration Statement on Form S-1 (File No. 333-48299)
         filed with the Commission on April 23, 1998).

4.4      Sauer Inc. 1998 Long-Term Incentive Plan.

4.5      Sauer Inc. Non-Employee Director Stock Option and Restricted Stock
         Plan.

5.1      Opinion of Spencer Fane Britt & Browne LLP regarding the validity of
         the Common Stock.

23.1     Consent of Arthur Anderson LLP.

23.3     Consent of Spencer Fane Britt & Browne LLP (included in Exhibit 5.1).

24.1     Power of Attorney (included in Signature Page).
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 20740}]
{"company-data": {"conformed-name": "SAUER INC", "cik": "0000865754", "assigned-sic": "3590", "irs-number": "363482074", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-53927", "film-number": "98634365"}, "business-address": {"street1": "2800 EAST 13TH STREET", "city": "AMES", "state": "IA", "zip": "50010", "phone": "5152396000"}, "mail-address": {"street1": "2800 EAST 13TH STREET", "city": "AMES", "state": "IA", "zip": "50010"}}
1
      As filed with the Securities and Exchange Commission on May 29, 1998
                                                    Registration No. 333-___

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  ------------
                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                                  ------------
                                   SAUER INC.
             (Exact name of Registrant as specified in its charter)
                                  ------------
Delaware                                                            36-3482074
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                              2800 EAST 13TH STREET
                                AMES, IOWA 50010
                                 (515) 239-6000

       (Address, including zip code, and telephone number, including area
               code, of Registrant's principal executive offices)

                                  ------------

                     SAUER INC. NON-EMPLOYEE DIRECTOR STOCK
                        OPTION AND RESTRICTED STOCK PLAN

                    SAUER INC. 1998 LONG-TERM INCENTIVE PLAN
                            (Full Title of the Plans)
                                  ------------
                               KENNETH D. MCCUSKEY
                             TREASURER AND SECRETARY
                                   SAUER INC.
                              2800 EAST 13TH STREET
                                AMES, IOWA 50010
                                 (515) 239-6364
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                                  ------------

                                    COPY TO:
                            JAMES W. KAPP, JR., ESQ.
                         SPENCER FANE BRITT & BROWNE LLP
                         1000 WALNUT STREET, SUITE 1400
                           KANSAS CITY, MISSOURI 64106
                                 (816) 292-8141
                                  ------------
                         CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM        PROPOSED MAXIMUM
     TITLE OF SECURITIES             AMOUNT               OFFERING PRICE             AGGREGATE                   AMOUNT OF
       TO BE REGISTERED      TO BE REGISTERED(1)(2)        PER SHARE(3)          OFFERING PRICE(3)           REGISTRATION FEE
Common Stock, $.01 par              2,650,000              $16.6875              $44,221,875.00                $13,045.46
value per share
(1)      250,000 shares of Sauer Inc. Common Stock, par value $.01 per share
         (the "Shares"), are being registered pursuant to the Sauer Inc. Non-
         Employee Director Stock Option and Restricted Stock Plan and 2,400,000
         Shares are being registered pursuant to the Sauer Inc. 1998 Long-Term
         Incentive Plan

(2)      This Registration Statement also covers such additional shares of
         Common Stock as may be issuable pursuant to antidilution provisions.

(3)      Estimated solely for the purpose of determining the registration fee
         pursuant to Rule 457(c), based on the average of the high and low
         prices per share of the Shares as reported by the New York Stock
         Exchange on May 26, 1998.
2
                                     PART II

                           INFORMATION REQUIRED IN THE
                             REGISTRATION STATEMENT

ITEM 3.           INCORPORATION OF DOCUMENTS BY REFERENCE.

         Sauer Inc. (the "Registrant") hereby incorporates by reference into
this Registration Statement the following documents filed by it with the
Commission:

         (a)      The Registrant's final prospectus dated May 11, 1998, as filed
                  with the Commission pursuant to Rule 424(b) of the Securities
                  Act, which contains audited financials for the fiscal year
                  ended December 31, 1997;

         (b)      The description of the Registrant's Common Stock, par value
                  $.01 per share (the "Common Stock"), contained in the
                  Registrant's Registration Statement on Form 8-A filed with the
                  Commission on May 7, 1998.

         In addition, all documents and reports filed by the Registrant
subsequent to the date hereof pursuant to Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act"), prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents or reports.

         Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.

ITEM 4.           DESCRIPTION OF SECURITIES.

         Not applicable. (The Common Stock is registered under Section 12 of the
Exchange Act.)

ITEM 5.           INTERESTS OF NAMED EXPERTS AND COUNSEL.

         Not applicable.

ITEM 6.           INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL")
permits a provision in the certificate of incorporation of each corporation
organized thereunder, eliminating or limiting, with certain exceptions, the
personal liability of a director to the corporation or its
3
stockholders for monetary damages for certain breaches of fiduciary duty as a
director. The Certificate of Incorporation of the Company eliminates the
personal liability of directors to the fullest extent permitted by Delaware law.

         Section 145 of the DGCL ("Section 145"), in summary, empowers a
Delaware corporation, within certain limitations, to indemnify its officers,
directors, employees and agents against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by them in connection with any suit or proceeding other than by or on
behalf of the corporation, if they acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to a criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful.

         With respect to a actions by or on behalf of the corporation, Section
145 permits a corporation to indemnify its officers, directors, employees and
agents against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit,
provided such person meets the standard of conduct described in the preceding
paragraph, except that no indemnification is permitted in respect of any claim
where such person has been found liable to the corporation, unless the Court of
Chancery or the court in which such action or suit was brought approves such
indemnification and determines that such person is fairly and reasonably
entitled to be indemnified.

         Article Ninth of the Restated Certificate of Incorporation of the
Company provides for the indemnification of officers and directors and certain
other parties of the Company to the fullest extent permitted by law. In
addition, the Company has entered into Indemnification Agreements with its
directors and certain officers pursuant to which the Company generally is
obligated to indemnify its directors and officers to the maximum extent
permitted by law. The Company also maintains directors and officers liability
insurance.

ITEM 7.           EXEMPTION FROM REGISTRATION CLAIMED.

         Not applicable.

ITEM 8.           EXHIBITS.

         Reference is made to the Exhibit Index filed herewith.

ITEM 9.           UNDERTAKINGS.

         (a)      The undersigned registrant hereby undertakes:

                  (1)      To file, during any period in which offers or sales
                           are being made, a post-effective amendment to this
                           registration statement:

                           (i)      To include any prospectus required by
                                    Section 10(a)(3) of the Securities Act of
                                    1933;
4

                           (ii)     To reflect in the prospectus any facts or
                                    events arising after the effective date of
                                    the registration statement (or the most
                                    recent post-effective amendment thereof)
                                    which, individually or in the aggregate,
                                    represent a fundamental change in the
                                    information set forth in the registration
                                    statement. Notwithstanding the foregoing,
                                    any increase or decrease in volume of
                                    securities offered (if the total dollar
                                    value of securities offered would not exceed
                                    that which was registered) and any deviation
                                    from the low or high end of the estimated
                                    maximum offering range may be reflected in
                                    the form of prospectus filed with the
                                    Commission pursuant to Rule 424(b) if, in
                                    the aggregate, the changes in volume and
                                    price represent no more than a 20% change in
                                    the maximum aggregate offering price set
                                    forth in the "Calculation of Registration
                                    Fee" table in the effective registration
                                    statement; and

                           (iii)    To include any material information with
                                    respect to the plan of distribution not
                                    previously disclosed in the registration
                                    statement or any material change to such
                                    information in the registration statement;

                           provided, however, that paragraphs (a)(1)(i) and
                           (a)(1)(ii) do not apply if the registration statement
                           is on Form S-3 or Form S-8, and the information
                           required to be included in a post-effective amendment
                           by those paragraphs is contained in periodic reports
                           filed by the registrant pursuant to Section 13 or
                           Section 15(d) of the Securities Exchange Act of 1934
                           that are incorporated by reference in the
                           registration statement.

                  (2)      That, for the purpose of determining any liability
                           under the Securities Act of 1933, each such
                           post-effective amendment shall be deemed to be a new
                           registration statement relating to the securities
                           offered therein, and the offering of such securities
                           at that time shall be deemed to be the initial bona
                           fide offering thereof.

                  (3)      To remove from registration by means of a
                           post-effective amendment any of the securities being
                           registered which remain unsold at the termination of
                           the offering.

         (b)      The undersigned registrant hereby undertakes that, for
                  purposes of determining any liability under the Securities Act
                  of 1933, each filing of the registrant's annual report
                  pursuant to Section 13(a) or 15(d) of the Securities Exchange
                  Act of 1934 (and, where applicable, each filing of an employee
                  benefit plan's annual report pursuant to Section 15(d) of the
                  Securities Exchange Act of 1934) that is incorporated by
                  reference in the registration statement shall be deemed to be
                  a new registration statement relating to the securities
                  offered therein, and the offering of such securities at that
                  time shall be deemed to be the initial bona fide offering
                  thereof.
5
         (c)      Insofar as indemnification for liabilities arising under the
                  Securities Act of 1933 may be permitted to directors,
                  officers, and controlling persons of the registrant pursuant
                  to the foregoing provisions, or otherwise, the registrant has
                  been advised that in the opinion of the Securities and
                  Exchange Commission such indemnification is against public
                  policy as expressed in the Act and is, therefore,
                  unenforceable. In the event that a claim for indemnification
                  against such liabilities (other than the payment by the
                  registrant of expenses incurred or paid by a director, officer
                  or controlling person of the registrant in the successful
                  defense of any action, suit or proceeding) is asserted by such
                  director, officer or controlling person in connection with the
                  securities being registered, the registrant will, unless in
                  the opinion of its counsel the matter has been settled by
                  controlling precedent, submit to a court of appropriate
                  jurisdiction the question whether such indemnification by it
                  is against public policy as expressed in the Act and will be
                  governed by the final adjudication of such issue.

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Ames, State of Iowa, on the 29th day of May, 1998.

                                             SAUER INC.

                                             By: /s/ Kenneth D. McCuskey
                                                 ------------------------------
                                             Name:  Kenneth D. McCuskey
                                             Title:  Treasurer and Secretary
6
                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby severally constitutes and appoints Tonio P. Barlage and
Kenneth D. McCuskey, and each of them, as his true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities (until revoked in writing),
to sign any and all amendments, including post-effective amendments and
supplements, to this Registration Statement on Form S-8, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or his or their substitute may
lawfully do or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Signatures                         Title                         Date
--------------------------------------------------------------------------------

/s/ Klaus H. Murmann
-------------------------          Chairman and Chief           5/29/98
Klaus H. Murmann                   Executive Officer and         
                                   Director (Principal           
                                   Executive Officer)            
/s/ Tonio P. Barlage     
-------------------------          President and Chief          5/25/98   
Tonio P. Barlage                   Operating Officer and         
                                   Director                      
/s/ David L. Pfeifle 
-------------------------          Executive Vice President     5/28/98 
David L. Pfeifle                   and Director                  
                                                                 
/s/ Nicola Keim                                                 5/27/98
-------------------------          Director                      
Nicola Keim                                                      
                                                                 
/s/ Johannes F. Kirchhoff     
-------------------------          Director                     5/29/98 
Johannes F. Kirchhoff                                            
                                                                 
/s/ Sven Murmann 
-------------------------          Director                     5/28/98 
Sven Murmann
7

/s/ Agustin A. Ramirez 
------------------------            Director                    5/26/98
Agustin A. Ramirez

/s/ Richard M. Schilling
------------------------            Director                    5/28/98
Richard M. Schilling

/s/ Kenneth D. McCuskey  
------------------------            Treasurer and Secretary     5/29/98
Kenneth D. McCuskey                 (Principal Accounting
                                    Officer)
8
                                   SAUER INC.

                                  EXHIBIT INDEX

Exhibit
Number                              Description

4.1      Restated Certificate of Incorporation of the Registrant (incorporated
         herein by reference to Exhibit 3.1(c) to Amendment No. 1 to the
         Registrant's Registration Statement on Form S-1 (File No. 333-48299)
         filed with the Commission on April 23, 1998).

4.2      Restated By-laws of the Registrant (incorporated herein by reference to
         Exhibit 3.2 to the Registrant's Registration Statement on Form S-1
         (File No. 333-48299) filed with the Commission on March 20, 1998).

4.3      Form of Certificate of the Common Stock of the Registrant (incorporated
         herein by reference to Exhibit 4.1 to Amendment No. 1 to the
         Registrant's Registration Statement on Form S-1 (File No. 333-48299)
         filed with the Commission on April 23, 1998).

4.4      Sauer Inc. 1998 Long-Term Incentive Plan.

4.5      Sauer Inc. Non-Employee Director Stock Option and Restricted Stock
         Plan.

5.1      Opinion of Spencer Fane Britt & Browne LLP regarding the validity of
         the Common Stock.

23.1     Consent of Arthur Anderson LLP.

23.3     Consent of Spencer Fane Britt & Browne LLP (included in Exhibit 5.1).

24.1     Power of Attorney (included in Signature Page).