Mercedes-Benz – capturing the history of the auto industry

As one of the pioneers of the auto industry, the history of Mercedes-Benz provides a window into the way that the internal combustion engine has transformed society in less than 100 years.

It also reflects the shifting economic fortunes of countries and regions. In December 2012, the Daimler Supervisory Board appointed Hubertus Troska as the member of the Board of Management for the newly created position of “China”. Troska is now CEO and Chairman of Daimler Northeast Asia and responsible for all of Daimler’s strategic and operating activities in China. The appointment of Troska expands the Daimler Board of Management to eight members. “China has developed into the world’s biggest market for motor vehicles. With the decision to establish a Board of Management position specifically for this market, we are underscoring the strategic importance of China for Daimler.

We continue to see great potential there for sustained growth and the continuous expansion of our business activities,” said Manfred Bischoff, Chairman of the Daimler Supervisory Board at the announcement of the new position.

Daimler AG celebrated 125 years of the automobile in 2011. It was in January 29th 1886 that Carl Friedrich Benz patented the Motorwagen. While Benz, along with his wife Bertha Benz, were doing pioneering research and development in the gasoline powered automobile – Benz’s two German contemporaries, Gottlieb Daimler and Wilhelm Maybach were partners in a venture with a similar goal in mind. Daimler and Maybach were also working on horseless carriages.

By 1887, the Motorwagen Model 3 (the first model had been tested in 1885 and then again the Model 2 in 1886), had launched. The three-wheeled vehicle, with its combustion engine and electric ignition, was sold under the Benz Patent Motorwagen brand name – making it the first automobile to be marketed commercially. A popular story is that Bertha Benz decided to help promote his invention by taking it on a 120- mile drive without his prior knowledge. She apparently served as her own mechanic on the trip. Bertha’s adventurous spirit and early marketing savvy resulted in a sale of the Motorwagen Model 3.

One short fall of Bertha Benz’s car journey with the Model 3 was that since the early version had no gears, it couldn’t go uphill. This was rectified after Bertha’s driving tour. In 1888, gasoline was available in chemists as it was sold as a cleaning agent. Between 1886 and 1893 around 25 Motorwagens were built – with the vehicle making its debut at the Paris World Fair in 1889. Carl’s company Benz & Cie, grew from strength to strength after that. By the end of the nineteenth century Benz & Cie was the largest automobile company in the world, with 572 units produced in 1899.

While Carl Benz was developing his vehicle, Gottlieb Daimler and Wilhelm Maybach were also working on developing gasoline engines. The two men went to work on developing light-weight, high speed internal combustion engines from 1882. Maybach unearthed a patent belonging to an Englishman called Watson describing an unregulated hot-tube ignition system – an essential element in generating high engine speed. The horizontal engine of 1883 was followed by the “grandfather clock,” a particularly lightweight and compact engine with a vertically-fixed cylinder which was particularly suited to installation in vehicles. In 1885, the new engine was installed first into a wooden riding car and then, a year later, into a carriage.

In 1890, Daimler founded the Daimler Motoren Gesellschaft (DMG) and Maybach and Daimler’s partnership resulted in the spray-nozzle carburetor and the Phoenix engine and improvements to the belt drive system. Early Daimler cars were four-wheeled, with two-cylinder engines with a 6 hp belt. By 1898, DMG had started producing Phoenix cars with front-mounted, 8-hp engines – the world’s first road vehicles with four-cylinder engines. Emil Jellinek, a businessman, advertised and sold Daimler automobiles among the higher echelons of society. By 1900 DMG had supplied him with as many as 29.

Jellinek constantly demanded faster, more powerful cars from DMG, and entered these in race meetings. Jellinek’s most important race was Nice Week where he raced under a pseudonym – his daughter’s name, Mercedes. In April 1900, when Jellinek and DMG came to an agreement about the sale of cars and engines, the name was also included as a product designation. It was decided that a new engine would be developed and bear the name Daimler- Mercedes. Maybach designed the first “Mercedes” in 1900 – it was a sensation at Nice Week in 1901. The first Mercedes was a 35 hp racing car and had a low center of gravity, pressed steel frame, high-powered engine and a honeycomb radiator. With its innovations, it is regarded as the first modern automobile.

With the outbreak of World War I, Germany’s automobile industry took a beating. As in other industries, companies tried to merge to benefit from economies of scale. After initially entering into a joint venture with the aim of rationalizing production (with a major role played by Deutsche Bank), the two companies – Daimler Motoren Gesellschaft and Benz & Cie finally merged in 1926 to form Daimer-Benz AG, with its registered office in Berlin and administrative headquarters in Stuttgart. Under the leadership of Wilhelm Kissel, the company stabilized by strictly limiting the number of vehicles and introducing a flexible production system at the large factories in Unterturkheim, Sindelfingen and Mannheim. This helped the company survive the Great Depression which impacted the world economy from 1929. Of these, the supercharged sports car in its various versions S, SS and SSK was the showcase model of the Daimler-Benz brand which not only achieved motorsport success, but also helped improve the company’s export record. During the world economic crisis, the Stuttgart automaker also managed to add the 170 Mercedes to its model range. In the commercial-vehicle sector, Daimler-Benz introduced the first compressorless six-cylinder diesel truck in 1927. The Lo 2000 developed by Daimler-Benz at the beginning of the 1930s brought the company the major breakthrough in the truck business. During World War II, the company shifted its focus to support Germany’s war efforts. Post 1945, it took years for Daimler-Benz to recover from the impact of war reparations. During the period from 1949 to 1960, in the fast-expanding German automotive industry Daimler-Benz AG succeeded in regaining the position it had enjoyed before the Second World War. As early as 1954 the company cracked the billion dollar mark in terms of turnover, and with that, broke the existing sales record. What helped Daimler-Benz keep its premier position are the people who played a critical role in the engineering and design departments. In 1938, Béla Barényi, a visionary in automotive safety was given carte blanche by Daimler-Benz. In 1951 Barényi achieved a breakthrough in safety development when he applied for a patent for the foundation of the safety passenger compartment The concept of defined crumple zones in combination with a highstrength passenger compartment, in August 1952, is a milestone of passive safety. This innovation first entered into the production of luxury model series W 111, the “Tailfin,” presented in August 1959. The safety steering wheel goes back to a Barényi idea dating from 1947.

“A company like Daimler-Benz cannot live from hand to mouth. Mr Barényi, you are thinking 15 to 20 years ahead. In Sindelfingen we’ll wrap you in cotton wool. What you invent goes straight to the Patents department,” said Wilhelm Haspel who went on to become chairman of Daimler-Benz AG. This meant carte blanche, so to speak, for this creative thinker, because freed from the constraints of series production development he could now develop his ideas and commit them to paper.

Haspel, was not overstating the case with his assessment. The future VW Beetle, for instance, showed a great many constructional parallels to the coming “people’s car” that was the subject of the paper that Béla Barényi had submitted back in 1925/26 at the Mechanical Engineering School for his examination. And in the area of vehicle safety, one finds design solutions which Barényi had devised and readied for production.

As early as 1948, he designed a “vanishing windscreen wiper” that, when switched off, was covered by the body and as a result posed less risk of injury to pedestrians. This idea became reality for the first time in the W 126 S Class built from 1979 to 1991. Similarly, from the 1957, Paul Bracq, head of Daimler-Benz’s Advanced Design studios, worked on the most expensive and complex Mercedes-Benz – the MB 600. He also designed iconic cars such as the 230SL Pagoda, the 220S Coupe, the 250 and 220D as well as the W108 series. Bracq is credited with defining the design of the Mercedes-Benz car – initially with the 600 – to the famous international look it became known for.

Another iconic automotive designer, Bruno Sacco, joined Daimler-Benz in the late 50’s. Until his retirement in 1999, Sacco was responsible for every Mercedes vehicle. Some of his best known work includes that for the C111 concept car, the S-Class luxury car, the C-Class compact executive car, the E-Class sedan, the CLK and SLK sports car and the M-Class luxury SUV.

A major turning point for Daimler-Benz was when the company merged with the Chrysler Corporation in 1998 to form Daimler Chrysler AG. The merger was not as successful as hoped, and in 2007 Daimler offloaded the Chrysler Corporation to Cerberus Capital Management for over US$7 billion. And the company name changed again to Daimler AG. The renaming of the company was to make a clear distinction between the company brand Daimler and the Group’s various activities. Today, Daimler AG says it is confident of facing economic challenges and indeed any other hurdles facing automotive manufacturers. The biggest challenge of which is sustainable mobility. “Our objective is to secure sustainable mobility on a long term basis – as anchored in our road map,” says Thomas Weber, member of the Board of Management of Daimler AG Group Research & Mercedes-Benz Cars Development. “We intend to be leaders in green technologies while, on the other hand, not neglecting typical Mercedes-Benz virtues such as safety, comfort, or superior driving pleasure. We make high investments to this end. However, Daimler and Mercedes-Benz do not only stand for topics of the future such as electric automobiles powered by the fuel cell or the battery. Our current models already incorporate effective technologies for even more efficiency, environmental compatibility, and safety.”

“In the first stage, we are setting out to achieve this with our Blue EFFICIENCY measures for passenger cars with state-of the- art internal combustion engines. These include downsizing, high-pressure supercharging, direct injection, and strategic optimization measures on the vehicle itself, for example in matters of aerodynamics, lightweight design, and energy management. Great potential for further enhanced efficiency is also offered by made-to-measure hybridization in a number of stages,” he says.

Speaking at the release of the 2012 third quarter results, Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars said: “Due to the economic challenges, Daimler will not match the high prior-year EBIT in full-year 2012, but will still post good earnings once again. But we are not yet at the level that we aim to reach in the medium to long term. We have therefore initiated appropriate measures for all divisions and are thus prepared for a difficult market environment.

At Mercedes-Benz Cars, we are adding an important element to our Mercedes-Benz 2020 growth strategy: ‘Fit for Leadership.’ With this program, we are combining existing and additional efficiency measures in order to secure our short-term targets and to give our business system an optimal and sustainable positioning.” Zetsche’s goal is to increase Daimler’s sales by 2020. “We have made considerable productivity gains from the old to the new generation,” explained Wolfgang Bernhard, Member of the Board of Management of Daimler AG Manufacturing and Procurement Mercedes-Benz Cars and Mercedes-Benz Vans.