The History of Mercedes-Benz

Short Answer

Mercedes-Benz traces its history to 1886, when Carl Benz in Mannheim and Gottlieb Daimler in Stuttgart, working separately, built the world’s first automobiles. Their companies, Benz & Cie. and Daimler-Motoren-Gesellschaft, merged in 1926 to form Daimler-Benz AG, which used forced labour on a large scale under National Socialism. After post-war reconstruction, the Chrysler merger and the separation of its truck business, the company has been called Mercedes-Benz Group AG since February 2022.

Where did Mercedes-Benz begin?

Mercedes-Benz goes back to two pioneers who never met: Gottlieb Daimler (1834–1900) and Carl Benz (1844–1929). In November 1885 Daimler and his partner Wilhelm Maybach completed a test run of their two-wheeled “riding car”, powered by a compact engine nicknamed the “grandfather clock”. In 1886, working independently, Benz in Mannheim and Daimler in Stuttgart built the world’s first automobiles: Benz’s three-wheeled Patent Motor Car and Daimler’s motor carriage, the first with four wheels. On 29 January 1886 Benz applied for a patent for his “vehicle powered by a gas engine”, and Mercedes-Benz regards that patent, number 37435, as the birth certificate of the automobile. Each man’s business became one of the two companies behind today’s Mercedes-Benz: Daimler-Motoren-Gesellschaft (DMG) and Benz & Cie.

How did Benz and Daimler turn invention into business?

In August 1888 Bertha Benz and her sons Eugen and Richard drove an improved Patent Motor Car from Mannheim to Pforzheim and back, about 180 km, the first long-distance journey in motoring history. Carl Benz patented double-pivot steering in 1893, and the Benz Velo of 1894, of which some 1,200 were built, became the world’s first production car. At DMG, a racing car commissioned by Emil Jellinek was named after his daughter, Mercedes. The Mercedes 35 hp won at Nice racing week in late March 1901, and in 1902 DMG had “Mercedes” protected as a brand name. In December 1903 DMG moved production from Cannstatt to Untertürkheim to keep up with demand.

How did Daimler and Benz become one company?

The two companies first formed a joint venture to rationalise production. Then, with Deutsche Bank playing a major role, they merged in 1926 to form Daimler-Benz AG, registered in Berlin with its administrative headquarters in Stuttgart. The trademark of a three-pointed star in a laurel wreath was created in 1925, in time for the merger. Under Wilhelm Kissel the new company was stabilised by strictly limiting the number of models, and it came through the world economic crisis that began in 1929.

What did Daimler-Benz do under National Socialism?

From 1937 Daimler-Benz increasingly produced armaments, including trucks and aircraft engines, and armaments made up a growing share of its revenue up to the war. In 1936 it built the Genshagen plant, in a concealed forest location south of Berlin, to make aircraft engines. By the end of 1942 passenger-car production had virtually stopped. Daimler-Benz used forced labour: prisoners of war, abducted civilians and concentration camp detainees. The company’s own history says that workers from eastern Europe and prisoners of war were held in barrack camps in poor, prison-like conditions, and that concentration camp detainees, guarded by the SS in inhumane conditions, were “loaned out” to companies in exchange for money. In 1944 almost half of Daimler-Benz’s 63,610 employees were civilian forced labourers, prisoners of war or concentration camp detainees.

How has the company dealt with that history?

After the war Daimler-Benz admitted its links with the Nazi regime. It joined the German industry foundation initiative “Remembrance, Responsibility and Future”, whose work included humanitarian aid for former forced labourers. Denazification also reshaped the Board of Management: Otto Hoppe, whom the Nazis had forced off the Board in 1942 because his wife was Jewish, was reappointed on 1 May 1945.

How did Daimler-Benz rebuild after the war?

In 1945, under the Potsdam Agreement, Daimler-Benz lost all its foreign subsidiaries, affiliates and branches and all its assets in the Soviet-occupied areas. It was left with four plants in southern Germany (Untertürkheim, Sindelfingen, Mannheim and Gaggenau) and Berlin-Marienfelde, and Untertürkheim at first worked mainly as a repair facility for American military vehicles. A new production permit came from the American occupation authorities on 3 January 1946; all plants were producing again by 1947, and reconstruction was complete in 1951. In 1954 turnover passed the billion mark for the first time, and by 1960 the company had regained its pre-war position. The 300 SL Gullwing, first shown as a racing prototype in 1952, and the 1959 “tailfin” Mercedes, the first to combine front and rear crumple zones with a rigid passenger compartment, date from this period. Daimler-Benz took over Auto Union in 1958 and sold it in 1965; at the end of 1959 its plan to acquire BMW as well was blocked by BMW’s small shareholders.

How did ownership and strategy change from the 1970s?

In the mid-1970s the Quandt family sold its 14 percent of Daimler-Benz to the Government of Kuwait, and Friedrich Flick’s 29 percent block went to Deutsche Bank. From 1985, on Edzard Reuter’s initiative, Daimler-Benz expanded into sectors such as electronics and aviation to become an “integrated technology group”, taking over Dornier and AEG in 1985 and MBB in 1989; Mercedes-Benz AG was established on 29 June 1989. In 1993 Daimler-Benz was listed on the New York Stock Exchange. The diversification did not bring the results hoped for, and from 1995 Jürgen E. Schrempp refocused the group, parting with Fokker, selling Dornier Luftfahrt and dissolving AEG.

What happened with Chrysler?

Daimler-Benz and Chrysler Corporation signed a merger contract on 7 May 1998, creating DaimlerChrysler AG, and at the end of the 1990s the Maybach brand was revived. In 2007 the majority stake in the Chrysler Group was sold, and in October 2007 an extraordinary general meeting approved the new name Daimler AG. On 27 April 2009 Daimler gave up the 19.9 percent stake it had kept in Chrysler. In the 2008–2009 global economic crisis Daimler made losses from mid-2008, and in early 2009 it raised its capital by about ten percent, gaining Aabar Investments PJSC, an investment company listed in Abu Dhabi, as a new major shareholder.

Where does Mercedes-Benz stand today?

The Mercedes-Benz Museum opened outside the Untertürkheim factory gates in spring 2006. Electric cars came under a new product and technology brand, EQ: the Concept EQ was shown in Paris in 2016, and the EQC of 2018 was the first Mercedes-Benz under that brand. In 2019 shareholders approved a new group structure, and Ola Källenius became Chairman of the Board of Management. In 2021 the truck business was separated in the Daimler Truck spin-off, approved at an extraordinary general meeting in October 2021, and on 1 February 2022 Daimler AG became Mercedes-Benz Group AG, focused on Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach and Vans.

Common Questions

• Did Carl Benz or Gottlieb Daimler invent the car? Both, independently. In 1886 Benz in Mannheim and Daimler in Stuttgart each built an automobile, and the two men never met. Mercedes-Benz regards Benz’s patent application of 29 January 1886, patent number 37435, as the birth certificate of the automobile.
• Why is the brand called Mercedes? DMG built a racing car commissioned by Emil Jellinek and named it after his daughter, Mercedes. After the Mercedes 35 hp won at Nice racing week in 1901, DMG had “Mercedes” protected as a brand name in 1902.
• Did Daimler-Benz use forced labour in the Second World War? Yes. The company’s own history says that in 1944 almost half of its 63,610 employees were civilian forced labourers, prisoners of war or concentration camp detainees.
• Is Mercedes-Benz still part of Daimler? The company once called Daimler AG became Mercedes-Benz Group AG on 1 February 2022, after its truck business was separated in the Daimler Truck spin-off in 2021. Mercedes-Benz Group focuses on Mercedes-Benz, Mercedes-AMG, Mercedes-Maybach and Vans.
• Did Mercedes-Benz merge with Chrysler? Yes. Daimler-Benz and Chrysler merged in 1998 to form DaimlerChrysler AG. The majority stake in Chrysler was sold in 2007, the company was renamed Daimler AG, and the last 19.9 percent stake was given up in 2009.

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