Mercedes-Benz
Mercedes-Benz Group AG, known as Daimler AG until February 2022, is a German multinational automotive manufacturer headquartered in Stuttgart. It produces luxury and premium passenger cars and vans under the Mercedes-Benz marque, along with the AMG, Maybach and G-Class sub-brands, and holds a substantial shareholding in Daimler Truck, which it separated in 2021.
| Mercedes-Benz Group AG | |
|---|---|
| Type | Public |
| Traded as | FWB: MBG; DAX component |
| Industry | Automotive |
| Founded | 28 June 1926 as Daimler-Benz; predecessors from 1883 and 1890 |
| Founder | Karl Benz, Gottlieb Daimler, Wilhelm Maybach |
| Headquarters | Stuttgart, Germany |
| Area served | Worldwide |
| Key people | Ola Källenius (chairman of the board of management), Bernd Pischetsrieder (chairman of the supervisory board), Harald Wilhelm (chief financial officer) |
| Products | Luxury and premium automobiles, vans, financial services |
| Revenue | Approximately €145 billion (2024) |
| Employees | Approximately 166,000 |
| Website | group.mercedes-benz.com |
The company's predecessors built the first automobiles. Karl Benz patented the Benz Patent-Motorwagen in January 1886, generally recognised as the first practical vehicle powered by an internal combustion engine, and Gottlieb Daimler and Wilhelm Maybach independently developed a high-speed petrol engine in 1885 and a four-wheeled vehicle in 1886. Their two companies, Benz and Cie. and Daimler-Motoren-Gesellschaft, merged in 1926 to form Daimler-Benz, and the Mercedes-Benz marque dates from that merger.
The Mercedes name derives from Mercédès Jellinek, the daughter of Emil Jellinek, an Austrian businessman and Daimler distributor who in 1900 commissioned a new car on condition that it be named after her and that he receive the selling rights; the resulting Mercedes 35 hp of 1901, designed by Maybach, is generally regarded as the first modern motor car, in that its long wheelbase, low centre of gravity, honeycomb radiator and pressed steel frame established the form that every subsequent car has followed.
History
Benz, Daimler and the invention of the motor car, 1883 to 1926
Karl Benz founded Benz and Cie. in Mannheim in 1883 and received German patent number 37435 for a vehicle powered by a gas engine on 29 January 1886. His wife Bertha Benz undertook the first long-distance automobile journey in August 1888, driving 106 kilometres from Mannheim to Pforzheim with their two sons without her husband's knowledge, repairing the vehicle with a hatpin and a garter along the way, and demonstrating its practicality in a manner the inventor's own promotion had failed to achieve.
Gottlieb Daimler and Wilhelm Maybach, working in Cannstatt, developed the Grandfather Clock engine in 1885, the first high-speed petrol engine, and fitted it successively to a bicycle, producing the first motorcycle, to a carriage and to a boat. Daimler-Motoren-Gesellschaft was founded in 1890.
The two companies competed for four decades without their founders ever meeting. Benz and Daimler both died before the merger, Daimler in 1900 and Benz in 1929.
The German economic collapse after the First World War and the hyperinflation of 1923 made independent survival impossible, and the companies entered an agreement of mutual interest in 1924 and merged on 28 June 1926 as Daimler-Benz AG. The three-pointed star, which Daimler had adopted in 1909 to represent motorisation on land, water and in the air, was combined with the laurel wreath of Benz to form the mark still used.
The Nazi period
Daimler-Benz produced aircraft engines, military vehicles and armaments for the National Socialist state, and used forced and slave labour extensively. At the height of production in 1944 approximately half its workforce, some 46,000 people, consisted of forced labourers, prisoners of war and concentration camp inmates, and conditions at several plants, including the aero engine works at Genshagen, were lethal.
The company commissioned a scholarly history of the period, published in 1986 and 1994, which documented the use of forced labour candidly; it was among the earlier German companies to do so. It contributed to the Remembrance, Responsibility and Future foundation established in 2000 to compensate surviving forced labourers, and has maintained a memorial and archive.
The family of Friedrich Flick, whose conglomerate held a substantial stake acquired during the period, was among the beneficiaries of aryanisation, and the shareholding passed to Deutsche Bank in 1975.
Postwar reconstruction and engineering leadership, 1945 to 1998
Production resumed in 1946 amid extensive bomb damage. The 300 SL of 1954, developed from a racing car and distinguished by its gullwing doors and by being the first production car with direct fuel injection, established the company's postwar reputation, and the 300 Adenauer served as the official car of the Federal Republic.
Mercedes-Benz's engineering reputation was built on safety and on durability. Béla Barényi, an engineer employed by the company from 1939, patented the crumple zone in 1951, the principle that a vehicle should deform in controlled fashion to absorb energy while a rigid passenger cell remains intact, and it is the single most important idea in automotive safety. The company introduced the passenger safety cell in the 1959 W111, the first production anti-lock braking system with Bosch in 1978, the driver airbag in 1981, the electronic stability programme in 1995 and side airbags in the same year, each subsequently becoming universal.
The W123 of 1976 and the W124 of 1984 were built to a standard of over-engineering that made them proverbial: very large numbers remain in service, and W123 saloons continue as taxis across Africa and the Middle East four decades later.
The company diversified extensively in the 1980s, acquiring the aerospace group Dornier, the electronics company AEG and MTU, forming Daimler-Benz Aerospace and an integrated technology conglomerate under Edzard Reuter, an arrangement that lost very large sums and was dismantled by his successor Jürgen Schrempp.
DaimlerChrysler, 1998 to 2007
On 7 May 1998 Daimler-Benz announced a merger with the American Chrysler Corporation, presented as a merger of equals and valued at approximately US$36 billion, creating DaimlerChrysler.
It was not a merger of equals and was not intended to be. Jürgen Schrempp acknowledged in a 2000 interview with the Financial Times that the language had been used for presentational reasons and that Chrysler had always been intended as a division, a disclosure that produced litigation by Chrysler shareholders led by Kirk Kerkorian, settled for US$300 million.
The combination failed comprehensively. The cultures were incompatible, the anticipated savings from shared platforms did not materialise because the vehicles had little in common, Chrysler's product range was weak, and American management departed. Daimler sold 80.1 per cent of Chrysler to Cerberus Capital Management in 2007 for approximately US$7.4 billion, having paid US$36 billion, and Chrysler entered bankruptcy two years later. The episode is the standard case study of a cross-border merger destroying value, and it is generally estimated to have cost shareholders more than US$30 billion.
Daimler also acquired a 34 per cent holding in Mitsubishi Motors in 2000 and disposed of it in 2005 at very large cost after that company's quality scandals.
Zetsche, recovery and the Chinese market, 2006 to 2019
Dieter Zetsche, who had run Chrysler and returned to lead the parent, was chief executive from 2006 to 2019 and restored the company's position. Its product range was renewed, its quality, which had deteriorated notably in the early 2000s, was addressed, and its sales in China grew from a small base into its largest market.
The company sold vehicles in record numbers through the 2010s and overtook BMW to become the largest premium car manufacturer in the world in 2016, a position it held for several years.
Zetsche also directed the CASE strategy, standing for connected, autonomous, shared and electric, which described the four changes the industry expected and which was widely imitated as a framing. Its practical expressions included the Car2Go car-sharing service, subsequently merged with BMW's DriveNow into Share Now and sold to Stellantis in 2022, and the EQ electric sub-brand.
Källenius, separation and retrenchment, 2019 to 2026
Ola Källenius, a Swedish executive who had run AMG and then research and development, became chief executive in May 2019.
His strategy has been to reduce the company to a luxury manufacturer rather than a volume premium one. The separation of Daimler Truck in December 2021, distributing 65 per cent to shareholders and retaining a minority, removed a business of comparable revenue and entirely different economics, and the parent was renamed Mercedes-Benz Group in February 2022.
The passenger car strategy announced in 2022 divided the range into entry, core and top-end luxury, with investment directed to the last, comprising Maybach, AMG, G-Class and the S-Class, on the reasoning that profit rather than volume should be the objective and that the very top of the market is the most defensible. The A-Class and B-Class were to be discontinued, the number of models at the entry level reduced, and prices raised.
The execution has been mixed. Volumes fell, which was intended, but the top-end sales did not rise sufficiently to compensate, and the company reduced its margin guidance repeatedly in 2024 and 2025. Its Chinese business, which had been the source of a very large share of profit, deteriorated sharply as domestic manufacturers took the premium segment with electric vehicles of comparable quality and superior software at lower prices, and the company's electric models sold poorly in every market.
The EQ range, comprising the EQS, EQE, EQB and EQA, was criticised for styling that departed from the marque's conventions in pursuit of aerodynamic efficiency, for being built on an adapted architecture rather than a dedicated one in several cases, and for being priced against combustion models it did not surpass. The company responded by abandoning the EQ naming, returning electric models to the conventional nomenclature, and delaying its previously announced intention to sell only electric vehicles from 2030, which was restated as a readiness to do so where markets allowed.
The CLA introduced in 2025 on the new MMA architecture, with a claimed range exceeding 750 kilometres and an efficiency substantially better than its predecessors, together with the electric G-Class and a renewed S-Class, constitute the company's response, alongside the MB.OS operating system developed in house after the difficulties several manufacturers experienced with software.
Products
Passenger cars
The range is designated by letters. The A-Class and B-Class are compact front-wheel-drive models; the C-Class is the volume saloon and estate; the E-Class the executive model, which in its various generations has been among the most widely used taxis and official cars in the world; and the S-Class the flagship, which has introduced a very large proportion of the industry's safety and comfort technology and which is the vehicle by which the marque is defined.
The GLA, GLB, GLC, GLE and GLS are the corresponding utility vehicles, which now constitute the majority of sales. The G-Class, in production since 1979 and originally developed as a military vehicle at the suggestion of the Shah of Iran, then a shareholder, has become an object of extreme desirability with a body shape essentially unchanged in forty-five years.
The CLA, CLE and CLS are coupé-styled variants, the SL and AMG GT are sports cars, and Maybach versions of the S-Class and GLS serve the market above them.
Mercedes-AMG, founded independently in 1967 by two former Daimler engineers, Hans Werner Aufrecht and Erhard Melcher, in Großaspach, from which the initials derive, was acquired progressively from 1999 and produces high-performance versions, its engines historically built by a single technician whose signature appears on a plaque.
Mercedes-Maybach revives a name that belonged to Wilhelm Maybach's own company and denotes the most expensive models, sold principally in China, the United States and the Middle East.
Vans
Mercedes-Benz Vans produces the Sprinter, among the most widely used commercial vans in the world and the vehicle on which a very large proportion of European and American delivery and conversion business is conducted; the Vito and V-Class; and the Citan. The division operates separately from passenger cars and serves fleet customers whose requirements are entirely different.
Financial services
Mercedes-Benz Mobility provides leasing, financing, insurance and fleet management, and finances a very large proportion of the group's retail sales. Its contribution to profit is substantial and its balance sheet makes the group, like every automotive manufacturer, partly a bank.
Technology and engineering
Safety
Mercedes-Benz's contribution to automotive safety exceeds that of any other manufacturer and is the work principally of one engineer.
Béla Barényi, a Hungarian-Austrian engineer employed from 1939 until 1972, held approximately 2,500 patents and is credited with the fundamental insight of passive safety: that a vehicle should not be rigid but should deform in a controlled sequence, absorbing energy in the front and rear while a rigid cell protects the occupants. He patented the arrangement in 1951 and it appeared in production on the 1959 W111. Every vehicle built since is constructed on the principle.
His other patents include the collapsible steering column, the safety door lock, the detachable hard top and a very large number of structural arrangements. He was inducted into the Automotive Hall of Fame in 1994, and the company has maintained his archive.
The marque subsequently introduced anti-lock braking to production with Bosch in 1978; the airbag in Europe in 1981; the pretensioning seat belt; the Electronic Stability Programme in 1995, developed after the A-Class overturned in a Swedish journalist's avoidance test in 1997, an incident that produced a recall, a redesign and the fitting of the system as standard across the range, which accelerated its adoption industry-wide; Pre-Safe in 2002, which prepares the vehicle for an imminent collision by tightening belts and closing windows; and attention assist, active braking and the suite of systems now general.
Autonomous driving
Mercedes-Benz was the first manufacturer in the world to obtain approval for a Level 3 conditional automated driving system for public roads, receiving German certification for Drive Pilot in December 2021 and beginning sales in May 2022. The system permits the driver to cease monitoring the road in dense traffic on designated motorways at speeds up to 95 kilometres an hour, with the manufacturer accepting liability while it is engaged.
The distinction from the driver assistance systems marketed by other manufacturers is legal rather than technical: a Level 2 system requires continuous supervision and the driver remains responsible, while a Level 3 system does not and the manufacturer is. Mercedes-Benz obtained approval in Nevada and California in 2023, and the conservatism of the operating conditions reflects the consequence of accepting that liability.
The company also pioneered autonomous driving research. Ernst Dickmanns, working at the Bundeswehr University Munich with Daimler-Benz support, demonstrated a van driving autonomously on public motorways at high speed in 1987 and 1994, a decade before comparable American work, in experiments that are generally underacknowledged in accounts of the field.
Software
MB.OS, the operating system developed internally and introduced from 2025, was the company's response to the general difficulty European manufacturers experienced when they attempted to build vehicle software with supplier-integrated architectures. It controls infotainment, driving assistance, the body and the charging functions, permits over-the-air updates, and is designed so that the company rather than its suppliers holds the customer relationship and the data.
The decision to build it followed the conspicuous failure of Volkswagen Group's Cariad software unit, which delayed several models across that group's brands, and reflects a general recognition that a vehicle is now defined by its software and that a manufacturer that does not control it becomes an assembler.
Design
Mercedes-Benz design has been directed by a small number of figures over a long period. Friedrich Geiger designed the 300 SL and the 600. Bruno Sacco, chief designer from 1975 to 1999, established the principles for which the marque is known: horizontal homogeneity, meaning that models across the range should be recognisably related, and vertical affinity, meaning that a design should not make its predecessor look obsolete, an explicit rejection of planned stylistic obsolescence. The W126 S-Class, the W124 and the R129 SL were produced under his direction and are widely regarded as the marque's high point.
Gorden Wagener has led design since 2008, introducing the sensual purity language of large, smooth surfaces with minimal lines. The approach has been criticised by those who prefer Sacco's restraint, and the electric EQ models in particular, whose smooth forms were dictated by aerodynamic efficiency, were regarded by many customers as insufficiently distinctive for the price; the company has since reintroduced more conventional proportions and detailing.
The three-pointed star remains among the most recognised trademarks in the world and has been used on the bonnet as a standing ornament for a century, a detail retained on saloons for reasons of tradition rather than function and which is spring-loaded to fold on impact.
Mercedes-Benz in culture
The marque occupies a position in popular culture that few manufacturers hold. It has functioned as the standard shorthand for arrival, from Janis Joplin's 1970 song requesting one from the Lord to a very large proportion of hip-hop, in which the S-Class and the G-Class recur continuously, to the taxi ranks of Europe and the diplomatic fleets of most of the world.
Its vehicles have served as the official cars of German chancellors, of popes through the Popemobile, of a considerable number of heads of state, and, in the 600 Grosser of the 1960s, of figures including Leonid Brezhnev, Mao Zedong, Idi Amin and John Lennon, a customer list that illustrates the neutrality of a product sold to whoever can afford it.
The Mercedes-Benz Museum in Stuttgart, opened in 2006 in a building by UNStudio whose double-helix structure allows visitors to descend through the chronology on two interleaved paths, holds approximately 160 vehicles and is among the most visited corporate museums in the world.
Motorsport
Mercedes-Benz's competition history is among the longest and most successful in motor racing, and is also marked by the sport's worst disaster.
The Silver Arrows of the 1930s, the W25, W125, W154 and W165, dominated Grand Prix racing against Auto Union in a period in which both teams were subsidised by the German state for propaganda purposes. The name derives from a story, of contested accuracy, that the W25 was found overweight before the 1934 Eifelrennen and that the white paint was scraped off overnight to reveal the aluminium beneath.
The company returned in 1954 with the W196, winning the world championship with Juan Manuel Fangio in 1954 and 1955, and competed in sports cars with the 300 SLR.
On 11 June 1955 at Le Mans, Pierre Levegh's 300 SLR struck the rear of a slower car and was launched into the enclosure opposite the pits, where the disintegrating car killed Levegh and at least 83 spectators and injured many more. It remains the most catastrophic accident in motorsport history. Mercedes-Benz withdrew from racing entirely at the end of the season and did not return as a works entrant for more than three decades, and the accident led to the abandonment of motor racing in Switzerland until 2015 and to extensive changes in circuit safety.
The company returned through Sauber in sports cars in the late 1980s, winning Le Mans in 1989, and supplied engines in Formula One from 1994 through Ilmor, which it acquired. It powered McLaren to the drivers' championship with Mika Häkkinen in 1998 and 1999 and Lewis Hamilton in 2008, and acquired the Brawn team in 2009 to compete as a works entrant.
The result was the most dominant period any team has had in the sport. Mercedes won eight consecutive constructors' championships from 2014 to 2021 and seven drivers' championships, six with Lewis Hamilton and one with Nico Rosberg, a record achieved through an engine architecture, the split turbocharger with compressor and turbine at opposite ends of the engine connected by a shaft through the vee, that competitors took years to match. Its dominance ended with the 2022 regulation change, and Hamilton left for Ferrari in 2025.
It also competes in Formula E and in the DTM and supports customer racing through AMG.
Corporate affairs
Ownership
Mercedes-Benz Group's shareholder register is unusual among German companies. Its largest holders are BAIC Group of China, with approximately 10 per cent, acquired in 2019, and Geely's chairman Li Shufu, with approximately 10 per cent, acquired in 2018 through an arrangement using derivatives that attracted regulatory attention over disclosure. The Kuwait Investment Authority holds approximately 5 per cent, a position dating from 1974 when it rescued the company from the acquisition of a controlling stake by the Shah of Iran.
The presence of two Chinese shareholders holding a combined fifth of a company whose principal competitors are increasingly Chinese is a matter of continuing comment in Germany, and the company's position is that both are financial investors without operational influence.
Governance and employees
The company operates under German codetermination, with half the supervisory board seats held by employee representatives and the works council exercising substantial influence over restructuring. It employs approximately 166,000 people, the majority in Germany, and its plants at Sindelfingen, Bremen, Rastatt and Berlin, together with Untertürkheim for engines and Kölleda and Hamburg for components, are among the largest industrial employers in the country.
It also manufactures in Hungary, Poland, the United States at Tuscaloosa, Alabama, which builds utility vehicles and exports a very large proportion of them, Mexico, Brazil, South Africa, India, Thailand and China, the last through the Beijing Benz joint venture with BAIC.
The company announced cost reduction programmes in 2024 and 2025 involving several billion euros of savings and voluntary redundancy in Germany, and the tension between those measures and the works council's position is the characteristic form of German industrial adjustment.
Finances
Mercedes-Benz Group reported revenue of approximately €145 billion in 2024, with adjusted returns on sales in the cars division falling from the mid-teens achieved in 2022 and 2023 toward single figures in 2025 as volumes, mix and Chinese demand deteriorated.
The company has returned substantial sums through dividends and share repurchases and has maintained a strong balance sheet, and it has stated that it will protect pricing rather than chase volume, a discipline that costs revenue and which its management regards as essential to a luxury position.
Controversies
Diesel emissions
Mercedes-Benz was implicated in the wider diesel emissions affair that began with Volkswagen in 2015. German authorities ordered recalls of several hundred thousand vehicles from 2018 over defeat devices that reduced exhaust treatment outside test conditions, the Federal Motor Transport Authority imposed a €870 million fine in 2019, and the company settled with American authorities in September 2020 for approximately US$1.5 billion covering civil penalties and vehicle modifications, without admitting liability. Class actions in Germany, the United Kingdom and elsewhere have continued.
Takata and other recalls
The company was among the manufacturers affected by the Takata airbag recall and has conducted recalls over a considerable number of other matters, including a 2024 recall in China and elsewhere over braking systems.
Historic matters
The use of forced and slave labour during the National Socialist period, documented in the company's own commissioned history, remains the most serious matter in its record. Its participation in the German industry compensation fund and its publication of the research have been regarded as comparatively forthcoming by the standards of German industry.
Competition
Mercedes-Benz competes with BMW and Audi, with which it forms the German premium group that has defined the segment for forty years; with Lexus; with Porsche and Ferrari at the top of its range; with Tesla, which took a substantial share of the premium electric market before its own difficulties; and, most consequentially, with the Chinese manufacturers.
The last is the strategic problem. BYD, NIO, Li Auto, Xiaomi and Zeekr produce electric and plug-in hybrid vehicles whose quality, software and equipment compare favourably with German products at prices substantially lower, and they have taken the Chinese premium market from the German manufacturers within approximately five years. China accounted for roughly a third of Mercedes-Benz sales and a larger share of profit, and its loss is not compensated by any other market.
European tariffs on Chinese electric vehicles imposed in 2024 have delayed rather than resolved the question, and the German manufacturers, which sell very large volumes in China, opposed them.
Assessment
Mercedes-Benz is the oldest automobile manufacturer in the world and the one whose engineering contributions are most numerous: the automobile itself, the modern motor car, the crumple zone, anti-lock braking, the airbag in Europe, stability control and a very large part of what a car is assumed to contain.
Its present position is the most difficult since the Chrysler period. Its Chinese business has deteriorated rapidly, its electric models have not sold, the luxury strategy has reduced volume without producing the compensating margin, and its software has lagged competitors whose vehicles are designed around it. Against this it retains a brand of extraordinary strength, a top-end range in which it has no serious competitor other than BMW and Rolls-Royce, an engineering organisation of genuine depth, and a balance sheet that permits it to invest through the transition.
Whether a manufacturer can retain a luxury position when the technology its customers value is one in which it no longer leads is the question the entire German industry faces, and Mercedes-Benz faces it with the strongest brand and the greatest exposure to the market where the answer is being determined.
Timeline
Key dates include Karl Benz's patent of 29 January 1886 and Gottlieb Daimler and Wilhelm Maybach's engine of 1885; Bertha Benz's journey in August 1888; the Mercedes 35 hp of 1901; the adoption of the three-pointed star in 1909; the merger of Daimler-Motoren-Gesellschaft and Benz and Cie. on 28 June 1926; the Silver Arrows of the 1930s; the use of forced labour during the war; the 300 SL of 1954 and the Formula One championships of 1954 and 1955; the Le Mans disaster of 11 June 1955 and the withdrawal from racing; Barényi's crumple zone patent of 1951 and its introduction in 1959; the 600 Grosser of 1963; the W116 S-Class of 1972 and the introduction of the S-Class designation; anti-lock braking in 1978; the G-Class in 1979; the airbag in 1981; the W124 in 1984; the A-Class moose test and the acceleration of stability control in 1997; the DaimlerChrysler merger in May 1998 and the sale of Chrysler in 2007; the acquisition of AMG completed in 2005; Dieter Zetsche's leadership from 2006; the return to Formula One as a works team in 2010 and the eight consecutive constructors' titles from 2014; the diesel emissions recalls and settlements from 2018 to 2020; Ola Källenius's appointment in May 2019; the separation of Daimler Truck in December 2021 and the renaming to Mercedes-Benz Group in February 2022; the Drive Pilot Level 3 approval in December 2021; the luxury strategy announced in 2022; and the MMA platform and CLA in 2025.
Sponsorship and partnerships
Mercedes-Benz has sponsored the UEFA European Championship, the German national football team, for which it is a long-standing partner, the Mercedes-Benz Arena in Stuttgart and Berlin, and, until 2025, the Mercedes-Benz Stadium in Atlanta. Its motorsport activity, described above, functions as the principal technical demonstration.
Its commercial partnerships have included arrangements with Nvidia on vehicle computing and autonomous driving, with Google on navigation data and mapping, with Luminar on lidar, with Factorial and Sila on battery chemistry, and with ChargePoint and Ionity on charging infrastructure, together with the North American charging network it is building with BMW and others.
Its relationship with Aston Martin, in which it holds a shareholding acquired in exchange for the supply of engines and electrical architecture, gives that company access to technology it could not develop and gives Mercedes-Benz an association with a marque positioned above its own.