Mercedes-Benz is one of the main subsidiaries of Daimler-Benz, which is the largest industrial group in Europe and whose business also include making truck, rocket, satellite and railways. Because of the strong background, Daimler-Benz merged with America is Chrysler in 1998 to form the 5th largest car maker in the world, DaimlerChrysler. It was said to be an equal merge although D-B has a slight majority share of 58%. However, in recent months we saw the American are either forced to retire (including Chrysler CEO Bob Eaton) or quit the board, leaving the German in decisive control. In other words, Chrysler is actually taken over by Mercedes. 

The merge complement the shorts for each other. Mercedes could help upgrading the quality control of its US partner and provide engineering service, that means Stuttgart will handle more research and development for Chrysler. Chrysler could also access the finest technology of Mercedes, especially is CDI common-rail diesel engine, low emission petrol engine, fuel cell technology and the rich experience in crash protection. This save a lot development budget and helps lowering the cost for Mercedes itself. On the other hand, Chrysler s facilities in the US could expand the production scale of M-B and give it larger market share to the North America market. 

Another investment in recent years is the Smart car. The idea was originated by SMH, the Swiss group producing Swatch watches. SMH asked M-B for help to put it into production, which resulted in the establishment of MCC (Micro Car Corporation), 51% owned by M-B. This is raised to 81% when the Smart needed more investment from M-B to undergo a major re-engineering in order to cure the roll-over problem. However, the expensive Smart turned out to be a sales disaster. Break even is not expected until 2002.

Mercedes-Benz

In 1885, Gottlieb Daimler and Karl Benz created petrol internal combustion motorcycle and 3-wheeler, respectively. Daimler's car was very raw, basically was a wooden bicycle installed with his own motor. Benz's car appeared several months later but it included advanced design such as battery-powered ignition and differential, though it can barely reached 8 mph because the motor output less than 1 hp. Next year, Daimler further put his world-leading engine into a horse carriage, this became the first 4-wheel motor car in the world. 

These 2 Germans were actually competitors although they worked just 60 miles apart. They established their own companies independently, that is, Benz and Daimler. The latter was renamed to Mercedes after the daughter of sales director Emil Jellinek. Daimler became the parent company which expanded into other industrial business.  

However, the inventors started to lose leading edge. French maker Panhard Levassor and Peugeot pioneered many new concept. Ford started mass production in 1908 while Mercedes and Benz were still making luxurious cars in limited amount. When the sales of Model T exceeded 1 million units in the mid-20 s, Mercedes and Benz faced financial crisis as Germany lost the first world war. This forced them to merge into Mercedes-Benz. 

In the 20 s, Austrian Ferdinand Porsche served M-B as chief engineer and gave birth to the supercharged S, SS and SSK sports cars. These cars brought M-B with motor racing heritage which would be followed by more GP cars from the 30 s to 50 s. The S series also established a prestige yet powerful image for the company. It might not be as elegant as Bugatti, but M-B always produced more cars to fulfil the demand from German Government officials and tycoons. Adolf Hitler was especially a loyal supporter of Mercedes.  

The grand tourer 500K / 540K was perhaps the peak of the pre-war Mercedes. Their build quality and classical styling had gone out of the shadow of Bugatti. After WWII, Mercedes scaled up the production gradually and introduced medium size models. At the upper end, the 300SL gullwing and 300SLR of the 50 s still thrilled the motor racing world.  

The 60 s saw M-B returned to radical idea with C111 concept car, a mid-engined sports car powered by rotary engine. Through the 70 is it started experimenting ABS, air bag, self tightening safety belt etc. 

In the 80 is and 90 is, we saw the company expanded quickly. Model ranges spread to lower price sector, first with 190E, then further with A-class. It also produced its first road-use SUV, ML-class (G-wagen was initially made for military purpose). The sports cars family has added SLK, CE / CLK to the range topping SL. 

There was a hard time in the early 90 s. The strong Deustch Mark, the high salary, the reunion of Germany and the recession in US hit Mercedes hard. It had to change its "engineering first" philosophy and let accounting men to keep development budget tightly in control. The current E-class was developed under that era and it received a bit criticism about build quality in the early days. Another act to cut cost is to adopt more platform sharing - the SLK and CLK are based on the C-class platform. A modular 90 degree V6 and V8 family could reduce production cost because they are manufactured in the same production line. Mercedes is now stronger than ever.