Daimler and Benz in Competition 1909 - 1925

Karl Ludvigsen
Ludvigsen Library and Daimler Archives
Daimler and Benz invented the automobile and by 1909 were setting world records, but by 1925 were both struggling to survive.

Daimler and Benz 1909-1925
The Cars and the Companies

Article by Karl Ludvigsen
Images from Ludvigsen Library and Daimler AG Archives
Though Daimler and Benz are given credit for invention of the automobile, that achievement failed to convey market leadership to Germany.
Its total vehicle production of 5,547 in 1908 compared poorly to France’s 25,000 and Britain’s 10,500, not to mention America’s 65,000. Nor were the authentic pioneers prominent in German statistics. While Benz accounted for 11.2 percent of German vehicle output, Daimler lagged with only 4.2 percent – a paltry 231 cars and trucks.

Image above; 1914 Mercedes in French Grand Prix at Lyons driven by Christian Lautenschlager.  The well-engineered automobile incorporated Paul Daimler’s improvements in the engine and, for the first time in a Daimler-built racing car, used shaft drive instead of chain drive.

Though yet to break out of three-figure annual production, Mannheim’s Benz was the healthier of the two German rivals. In 1905, Julius Ganss, who had revitalized its products by importing foreign technical talent, advanced from management to the supervisory board, which Max Rose had chaired since the turn of the century. Ganss then departed. From 1905, the Benz management board comprised Fritz Hammesfahr and Josef Brecht, joined in 1907 by Georg Wiss. That these were businessmen rather than creative spirits was right for Benz as it navigated the recession of 1907.

Benz RE built in 1909 to challenge land speed records when Benz temporarily withdrew from road racing. The car would go on to set records as the fastest vehicle in the world, first on the Brooklands track in England and then on the sands at Daytona Beach, Florida. Driven here by Buick racing star “Wild Bob” Burman, it was a celebrity in its own right. The weird mouthpieces were primitive radio intercom devices.
[Ludvigsen Library]

The Benz managers bet high on their company’s future. In 1906, they invested 1.6 million marks in a triangular site on the Luzenberg near Waldhof on the north side of Mannheim. Its 75 acres were well served by rail lines and close to both the Rhine and its junction with the Neckar River, giving access to Stuttgart and the south. Work began at once. By the summer of 1908, spacious new halls and offices were erected. Vehicle production began in 1909 while the original works on the Waldhofstrasse carried on its output of the stationary engines with which Karl Benz had started his business.

Truck production was a mainstay of Benz revenue during the Great War (here a line-up of new production at the Benz Mannheim Works in 1915). Below: Previously, for both companies, racing had been a major part of their image. This is a Mercedes 37/90 racing car in front of the Daimler Untertürkheim Works in 1911. (Ludvigsen Library)

An important acquisition added to the Benz strength. From 1905, the SAF company in Gaggenau, 45 miles south of Mannheim along the Rhine, had been producing cars and trucks. By 1908, SAF and its products were part of Benz & Cie., which was financially and legally restructured with fresh capital. With its truck production moved to Gaggenau, Benz nearly tripled its output to 1,721 units in 1910. It brushed up its image by revising the emblem it had been using since 1903. Still centered on the Benz name, it was surrounded by a laurel wreath instead of a cog wheel.

A laurel wreath was appropriate for Benz, which kept its sporting credentials intact despite an industrywide racing boycott that followed the dramatic 1908 Grand Prix in which Mercedes was first and Benz second. Together with 16 other key companies, Benz signed an agreement not to take part in major racing events in 1909 and indeed until further notice. Given teeth by a $20,000 penalty for default, the pact remained in effect for the German firms through 1912.

Thanks to the ambition of works driver and engineer Victor Hémery, Benz discovered an ingenious way around this barrier. The Frenchman was dismayed when Fred Marriott beat his official land speed record of 1905 at Daytona, Florida. Marriott’s canoe-shaped Stanley Rocket clocked 127.66 mph in one direction over the mile and 121.57 mph in the kilometer. The French auto club recognized the latter as a new record, while the former marked the first shattering of the 200 km/h barrier, which still remained unbroken in Europe.

Defeat was one thing, humiliation another. Aware of the speed potential of a developed version of his 1908 Grand Prix Benz, Hémery secured permission from Benz management to design and build a car with the potential of breaking the 200 km/h mark. Mannheim laid down a series of six cars with a 21.5-liter 4-cylinder engine, the largest ever installed in a car by Benz, Daimler, or the later hyphenated combination. Its design by Louis De Groulard produced 200 brake horsepower at a lazy 1,600 rpm.

Wearing slim, racy bodywork, the first such Benz was taken to England’s Brooklands track, where the British Automobile Racing Club’s supervision of records would be recognized in Paris. In November of 1909, Hémery put the car’s performance on the record books. Over the flying kilometer, the Benz was clocked at 125.947 mph, or 202.648 km/h. This achieved the driver’s goal of the first official fracturing of the 200 figure in Europe. His speed over the flying half-mile was even faster at 127.877 mph, or 205.666 km/h.

Two of the big Benzes made history in America, to which they were brought by New York’s Benz Auto Import Company. Its managing director, Jesse Froehlich, believed strongly in the value of publicity gained from racing. Billed as the “Blitzen Benz,” one such car broke records at Daytona, Florida, in the hands of Barney Oldfield in 1910, and again in 1911 driven by “Wild Bob” Burman, clocked at 141.732 mph over the beachfront mile. Having built decisively the world’s fastest car, Benz deserved a laurel wreath around its badge.

Theodor Dreher in the 1910 Mercedes that was entered in the Prince Heinrich Trial where Daimler introduced the V-shaped radiator. Austro Daimler swept the first three places, with the best Benz coming in fifth place. (Ludvigsen Library)

Meanwhile, Daimler-Motoren-Gesellschaft was also addressing its badge issues. At first, its Mercedes cars required no identifying emblem. Their distinctive honeycomb radiators were instantly recognizable. When they started to be blatantly copied, however, DMG needed to mark its models as originals. On some early cars, the initials “DC,” for Daimler Cannstatt, appeared before the factory moved to Untertürkheim in 1904.

In 1909, DMG supervisory board chairman Alfred von Kaulla decided that a distinctive emblem was required for the company and its cars. Paul and Adolf Daimler – the company founder’s two sons, and now senior executives at DMG – remembered a family story that their father had sent a picture postcard of Cologne and Deutz to his wife soon after taking a job as technical director of the Deutz gas-engine factory in 1872. On the card he had marked a star above his house and written that a star, symbolizing prosperity, would one day shine over a factory with his own name on it.

Above: From 1909, Paul Daimler staked his reputation on the sleeve-valved Knight engine in the Mercedes-Knight with its distinctive V-shaped radiator but unfortunately smoky engine. (Ludvigsen Library)

Accepting the suggestion, in June of 1909, DMG registered both three- and four-pointed stars as legally protected emblems. The three-pointed star, symbolizing the company’s ambition to build engines for use on land, sea, and air, was used. From 1910 onward, the company used a star on the radiator as its brand mark. The star within a circle was registered by the company in 1923 and thereafter would become the central symbol for the company.

From 1909, technical development of Mercedes products had rested in the hands of Paul Daimler, with his brother Adolf responsible for production. Paul shared operating authority for DMG with general director Ernst Berge. After joining Daimler’s Vienna branch in 1902, Berge came to Untertürkheim in 1905 and was named a board member in 1908, then general director during the war. “The development of DMG into a world-class firm is closely associated with his name,” the company later said of Berge.

Eager to put his own stamp on Daimler products, Paul staked a substantial share of his engineering standing on his 1909 decision to produce Mercedes engines with the Knight sleeve-valve system. Seeing and trying such engines at Britain’s Daimler company, Paul was convinced of the Knight system’s smoothness and quietness, replacing noisy poppet valves with sleeves around the pistons. Especially with poorer wartime lubricants, however, often smoky Mercedes-Knight engines failed to enhance the luster of the Stuttgart star.

Paul also brought a new look to his company’s cars. His entries for the 1910 Prince Heinrich Trial, a demanding long-distance test of touring cars, had new wind-cheating radiators. They were sharply V-ed, looking as fit as the prow of a ship to cleave the oncoming air. Later in 1910, Daimler fitted these distinctive “vee” radiators to his new range of sleeve-valve Mercedes cars.

By the early 1920s, the V-shaped radiator was well established as a Mercedes design feature. It gained added authority from the company’s success in France’s 1914 Grand Prix, the first race of its kind to impose an engine-capacity limit – 4.5 liters. The Untertürkheim entry was a Paul Daimler masterpiece, with four welded-steel cylinders topped by four valves apiece, operated by an overhead camshaft. Chain drive, heretofore common, was replaced by a live axle. Against tough French opposition, these white cars swept the top three places in what many still consider the greatest-ever Grand Prix.

Paul Daimler’s racing engine reflected much of the technology that DMG was investing in the engines that powered many of Germany’s World War I aircraft. Daimler, Benz, and other engine makers were encouraged to think about better aircraft power units in May of 1912, when regulations for the Kaiserpreis were announced. Recognition would be awarded for the best German aircraft engine, judged on the basis of low fuel consumption and high power from light weight. The results showed victory for Benz with its pushrod overhead valve four. Daimler engines placed second and fourth.

The second-ranked Daimler engine was a six, the only one to oust light, simple fours from the first five places. Designated the DF80, the six of 1913 set the design pattern for the highly successful Daimler 6-cylinder aero engines of World War I and indeed for engines produced by NAG, Benz, and BMW. Its influence ultimately extended to Rolls-Royce and to the American Liberty engine, through Packard and Hall-Scott.

Victory, however, went to the Allied powers. After the armistice on November 11, 1918, peacetime exacted its shaming toll on the German means and spirit. This culminated in the bitter indignation Germans felt over the terms of the Treaty of Versailles. Viewed as the illegitimate offspring of a humiliating defeat, the new Weimar regime – named for the city in which it was founded – struggled from crisis to crisis, battered on right and left by ultra-conservative nationalists and ultra-radical proto-communists.

Germany’s economy was in disarray after the war, according to Daimler’s Alfred Neubauer: “Stocks fell while prices and taxes rose, and almost daily another zero was added to the figures on our banknotes. You paid a million for a tram ride and a billion for a loaf of bread. Inflation roared through the exhausted nation. Sheer existence was obliterated, the wealthy melted like snow in sunshine and shrewd speculators profited from widespread destitution.”

German inflation soared relentlessly from 1918. From its value of 4.2 to the dollar before the war, the mark fell to 190 to the dollar at the close of 1921. This had the knock-on effect of encouraging the car market, with buyers eager to turn their currency into items of value before further depreciation. Vehicle production in 1920 approached pre-war highs, with 2,157 for Daimler and 2,927 for Benz. Thereafter a debilitating depression hit sales as the currency collapsed – 1922 ended with a dollar worth 7,353 marks. Although some stabilization occurred early in 1923, the year closed with the demoralizing absurdities related by Neubauer.

Relative calm came at the end of 1923, when the respected Hjalmar Schacht, named to head the Reichsbank, restored the mark to its former value of 4.2 to the dollar. This gave the car market a fresh stimulus, with Benz production recovering to 3,624 vehicles and Daimler to 2,287 – record highs of 7.6 and 4.6 of German output, respectively. Postwar competition intensified when the domestic auto market was invaded by German companies whose previous military production was squelched by the provisions of the Treaty of Versailles.

Germany still had a lot of catching up to do. In 1922, France had four times as many cars on the road as Germany’s 80,000, and Britain wasn’t far behind. While Benz was prepared to aim for volume and to exploit its excellent reputation for trucks, DMG pinned its hopes on high-technology. In wartime, it had experimented with supercharging to improve its engines’ high-altitude performance. As early as 1919, Paul Daimler was testing auto engines equipped with high-revving Roots-type blowers.

Mustering a production version into service didn’t take long. During 1922, Daimler introduced two supercharged production models. First to arrive was the 2.6-liter type 10/40/65, the last two figures indicating its unblown/blown horsepower. Later a smaller four, the 1.6-liter 6/25/40, entered production. One of these was the first blown Mercedes production car to race, competing in a hill climb in the Black Forest on July 12, 1922. Baron von Thüna from Berlin placed second in class, beaten by a Benz driven by Carl Tigler.

The defeated Germans faced constraints on their motor-racing opportunities. French and British trade groups agreed not to stage major races in 1919 and 1920. From its resumption in 1921 up to 1924, the French Grand Prix, still Europe’s premier race, was off limits to German and Austrian entries, as were other French and Belgian events. Nevertheless, both Benz and Daimler invested heavily in racing cars for the new 2.0-liter formula that took effect in 1922.

Through the war years, former Daimler man Friedrich Nallinger, now in his late 50s, had directed the engineering fortunes of Benz. With Josef Brecht, he led the company’s management board. Hans Nibel, who joined the board in 1917, assumed the responsibilities of an active chief engineer. Under Nibel were Robert Staffin, in charge of engine design, and Max Wagner, the chassis man. Wagner climbed the ladder rapidly after he joined Benz in 1910 at the age of 28.

Before the war, Fritz Erle, director of the experimental department and a racer as well as a racing manager, moved to Berlin to manage the Benz service branch. In his wake, filling both Erle’s experimental and race-management shoes, came a tall, serious Mannheim engineer named Willy Walb. Walb had come up through the aero-engine ranks after his arrival at Benz as a 24-year-old in 1914. Walb built a reputation as a perfectionist among perfectionists.

This was the core of the capable crew, charged by the board of the Rheinische Automobil- und Motorenfabrik AG Benz & Cie. with the responsibility for building a new production-car program in the chaotic economy of postwar Germany. Intrigued by the potential of the streamlined mid-engined cars introduced by Edmund Rumpler, they experimented with similar designs and laid down a Grand Prix car powered by a rear-mounted twin-cam six driving through swing axles. The streamlined Benzes placed fourth and fifth in the Italian Grand Prix in September of 1923, winning a solid-gold medallion from Monza organizers as the most outstanding new car.

Earlier in 1923, Daimler fielded a new 2.0-liter Grand Prix car at Indianapolis, which had adopted the new European formula. The first supercharged cars to compete on the hallowed speedway, they placed eighth and 11th after various problems. Re-engineered for 1924, this twin-cam four, driven by Christian Werner, was the winning car in that year’s demanding Targa Florio. Success in the Sicilian race was a spectacular coup for the Stuttgart company.

In 1923, for the Italian Grand Prix at Monza, Benz introduced the revolutionary Benz RH Tropfenwagen (Teardrop car) designed by Hans Nibel and Max Wagner. With its streamlined body shape and rear-mounted engine, it was decades ahead of its time. (Ludvigsen Library)

Updating of the Grand Prix Mercedes for 1924 was carried out by Ferdinand Porsche, installed as DMG’s engineering board member in 1923 after Paul Daimler resigned his post in the last days of 1922 to assume similar duties at Horch. Porsche arrived from Austro-Daimler, where he had been general manager. He joined a board that had been led capably since 1908 by shrewd salesman Ernst Berge. Berge, however, would yield to the events of 1924.

The period of inflation after World War I portended a difficult time for the automotive industry. Only financially strong companies with well-established brands were able to survive – though even these were forced into cooperative ventures. Just such a venture was the syndicate formed between Benz and Daimler in May of 1924. Its aim was to standardize design and production while unifying purchasing, sales, and advertising.

This alliance was chiefly the work of a prominent banker, Emil Georg von Stauss, who joined DMG’s board of directors in 1920. Called “something of an eccentric visionary,” von Stauss joined the supervisory boards of both companies. Wilhelm Kissel, a Benz man, was put in charge of making whatever economies could be gained from this entente. Described as a “clever, tough-minded engineer and businessman from the Rheinpfalz,” Kissel joined Benz in 1904 and since 1914 had been among its leading lights.

Above:  With its very modern supercharged 2-liter twin-cam 4-cylinder engine, Christian Werner drove this Mercedes, updated by Porsche, to victory at the Targa Florio in 1924. (Ludvigsen Library)

In advertisements, the two great marques were linked for the first time: “Mercedes-Benz.” Exciting new supercharged cars were on the drawing boards of Ferdinand Porsche’s designers. These, plus new volume models from Mannheim, should meet market demands. That was the intention of many. Von Stauss, however, envisioned the full merger of these proud companies. Would his conception prevail?

Above: By 1925, with the ravaged economy, Mercedes and Benz turned to cooperative development of new models for the consumer market, such as this Benz 11/40 Runabout. Despite runaway inflation, there were still customers who could afford such a car, the required chauffeur, and the time to picnic in the countryside. (Daimler Archives)