Introduction
Mercedes-Benz Group is a preeminent international automotive company, renowned as one of the world’s leading manufacturers of cars and sport-utility vehicles (SUVs).
Their vehicle brands include Mercedes-Benz, Mercedes-Maybach (ultra-luxury automobiles), Mercedes-AMG (high-performance vehicles), Mercedes-EQ (electric vehicles), and Smart (micro hybrid cars). The company also dedicates resources to technological research (through its Mercedes-Benz Research & Development subsidiary) and financial services such as auto loans, leasing, insurance, and fleet management (through its Mercedes Benz Mobility division). Daimler’s headquarters are in Stuttgart, Germany.
Invention, founding, and early history
Daimler-Benz was formed in 1926 by the merger of two pioneering German automobile companies. One was founded by Karl Benz, the other by Gottlieb Daimler. Both Benz and Daimler claimed to have invented the gasoline-powered auto engine. Benz constructed his first automobile in 1885, powered by a one-cylinder gasoline engine, and started selling cars in 1887. Daimler designed several gasoline-powered engines in 1883 and received a German patent on a three-wheeled gasoline-powered vehicle in 1885.
In 1890, Daimler established the firm of Daimler-Motoren-Gesellschaft to manufacture his expanding range of Daimler autos. The first Daimler-produced luxury car was sold to the sultan of Morocco in 1889. In 1901, Daimler launched the first Mercedes, equipped with a four-cylinder engine. Emil Jellinek, a diplomat and major Daimler investor, suggested the line be named after his daughter, Mercedes, because he feared the German-sounding Daimler name wouldn’t sell well in France.
The Benz company produced trucks as well as autos. Benz began producing trucks with fuel-saving diesel engines, which sprayed fuel oil into the combustion chamber under high pressure, before World War I.
After the merger of the two rival companies in 1926, their engineering teams collaborated to design the classic S series Mercedes. Daimler-Benz was the first company to use diesel engines in passenger cars; the diesel-equipped Mercedes-Benz became available in 1936.
During World War II, Daimler-Benz engines were used extensively in German tanks, bombers, and fighter planes. In 1944, Allied bombing almost destroyed the Daimler-Benz factories, but they were eventually rebuilt.
Postwar growth, diversification, and a “merger of equals”
By the early 1980s, strong demand for Mercedes both in Germany and abroad made Daimler-Benz Germany’s largest automaker in terms of sales revenue. Seeking to broaden its reach into high technology, Daimler-Benz acquired AEG AG (an electrical systems, turbine engines, and radio and radar communications systems maker), Dornier GmbH (aerospace and medical products), and Motoren- und Turbinen-Union GmbH (aircraft engines) in the mid-1980s. However, many of these acquisitions proved unprofitable, leading Daimler-Benz to undergo a major restructuring in the mid-1990s, which included the sale of numerous subsidiary businesses and a significant reduction in the company’s workforce.
In May 1998, Chrysler Corporation and Daimler-Benz announced plans to merge, with Daimler-Benz acquiring the U.S. automaker for over $35 billion in a stock swap. Shareholders from both companies approved this deal in September, and the merger was completed on November 12, 1998; DaimlerChrysler stock began trading on stock exchanges later that month. Dual headquarters and chairmen were established as part of the merger agreement, and DaimlerChrysler’s official language became English. Product brand identities were maintained separately; for example, no Mercedes would be sold at a Chrysler dealership, and no Chrysler car would carry Mercedes’s three-pointed star emblem.
In the early 2000s, DaimlerChrysler aimed to strengthen its position in the automobile industry. The company bought 34 percent of Mitsubishi Motors in 2000, a move that made DaimlerChrysler the third largest automaker in the world (after General Motors Corporation and Ford Motor Company). The following year, the company sold Adtranz, a supplier of rail systems, to focus on its automotive business. However, its agreement with Mitsubishi proved financially draining, and by 2005, DaimlerChrysler had fully divested its stake in the Japanese automotive corporation. The Chrysler division posted a loss of $1.5 billion in 2006, which led to its sale to the U.S. private equity firm Cerberus Capital Management in 2007. DaimlerChrysler was renamed Daimler AG in October 2007.
The post-Chrysler years and company split
After the nine-year merger was severed, Daimler focused on rebuilding its luxury image and advancing technological innovation. Top initiatives included:
- A revival of Maybach. The ultra-luxury carmaker competes with Rolls Royce, Bentley, and others.
- Wider rollout of AMG. In addition to AMG versions of its sedans and coupes, the company expanded its high-performance lineup to include AMG SUV models such as the GLE and GLS.
- Innovation in electric and autonomous vehicles. In 2016, Daimler introduced the EQ line of electric vehicles. Over the next few years, the company also increased its investment and research into battery technology. In 2017, the company partnered with German engineering giant Bosch to develop autonomous vehicles. In October 2021, Daimler shareholders voted to spin the truck and bus division into a separate company, enabling Daimler and the new entity to focus on their respective strengths. In December of that year, Daimler Truck Holding began trading on the Frankfurt Stock Exchange. In February 2022, Daimler changed its name to Mercedes-Benz Group to better reflect its focus on luxury passenger vehicles, its core products, under the flagship Mercedes-Benz brand.
