Benz & Cie and Daimler

Karl Benz, his company and Daimler

In 1894, a major innovation came with the Velo, which was smaller, lighter and cheaper than the Victoria. The vehicle was built on a large scale since 1,200 were produced between 1894 and 1901. But Benz was rather hostile towards innovations, in his opinion his vehicles were already working well and needed only minor improvements. And so Benz went from being the first and largest automobile company in the world to a minor competitor that had been technologically overtaken by other firms that had sprung in the meantime.

The velo (1894)
The velo (1894) was a huge commercial success for Kark Benz
The Benz PS70
The 70 PS (1907) was able to reach 100 km/h

This led to friction between Karl Benz and the other share holders. Eventually Karl Benz left the company and continued to collaborate only occasionally as a consultant.

In those years the real competition between firms was being played out essentially in the higher class segment, where Mercedes was the company to beat at all costs. For this reason it was decided to not continue with small engine size cars, but to make a special effort in the development of luxury models. In 1906 the Benz company presented three new cars: the 50 PS, 60 PS and 70 PS. PS stands for horsepower in German. The 70 PS was the first Benz to reach the incredible speed -for the time- of 100 km/h. While Ford was beginning to target the middle class in America, Benz found soon a niche with the rich European aristocracy.

In 1912 the company proposed even more sophisticated models like the 82/200 PS, capable of reaching 170 km/hour or 106 miles/hour. When the First World War arrived, Benz did exactly like the other industrials and converted its production lines to the war sector. But in 1918, after the end of the hostilities, Germany was a shadow of itself, a power brought to its knees. While the economy was in shamble, the car sales plummeted and the old Karl Benz suggested to form an alliance with a rival manufacturer to reduce costs and investments.


Like Karl Benz, Gottlib Daimler was a pioneer in the automobile industry. In 1885, he created te first motorcycle. The year after (so only one year after Benz), he finalized his first car, the Strahlradwagen. Both Benz and Daimler were targeting the same niche, wealthy aristocrats who wanted to purchase luxury cars. A turning point for automobile production came about in 1900, when the aristocrat Emil Jellinek, a wealthy German entrepreneur living in France, commissioned a new car. Jellinek was fascinated by speed, and he pressed for a sports car that had at least 35 hp. He also asked for the car to bear the name of his daughter, Mercedes. The first version of the car(1901) was an enormous success, so much that Paul Daimler - who succeeded his deceased father as manager of the firm-, decided to give the same name to all the future models.

The Mercedes simplex 1903
The Mercedes Simplex 1903,one of the first Mercedes

In order to satisfy the customers, the 4 cylinders models would soon incorporate aero-derived engines. But all German car makers were heavily affected by the defeat of Germany in 1918 and the serious economic crisis that followed. Sales plummeted, in spite of constant innovations.

In 1922 a brilliant Austrian engineer, Ferdinand Porsche, became the technical directors. Supercharged cars like the 24/100/140 PS were not sold in sufficient number due to the economic situation. Daimler and its competitor Benz were now selling only about 2,000 cars per year when they finally decided to merge.