Mercedes-Benz is the oldest car manufacturer in the world. The two original firms Benz & Cie. (founded by Karl Benz in 1883) and Daimler Motoren Gesellschaft (founded by Gottfried Daimler in 1890) amalgamated in 1926 into the Daimler-Benz AG. One of the young engineers at Daimler-Benz was Ferdinand Porsche who later became known for designing the VW beetle.
In the early days Mercedes-Benz AG produced a range of passenger and commercial vehicles and engines for ships, airships and airplanes. During the 1930s the company became heavily involved in the arms industry producing aircraft engines and military vehicles. Since the company produced all kinds of military vehicles during the First World War, its outlets were heavily bombed and 70% of its production capabilities destroyed. The reconstruction took a few years, but business picked up again during the 1950s when Daimler-Benz began to export passenger and commercial vehicles to India, Brazil, Argentina and the US.
Over the years the company had branched out so much that a major reorganisation was necessary. In 1989 the company was renamed Daimler-Benz and divided into three subsidiaries: Mercedes-Benz, AEG and Deutsche Aerospace. A year later another branch, Daimler-Benz Inter Services (debis) was added.
In the following years Mercedes-Benz opened a number of car plants abroad. Although Mercedes cars are still produced mainly in Germany an ever increasing number is manufactured in countries like South Africa, Mexico, USA, Brasil, India, South Korea and Vietnam. The reasons are manifold: lower production costs, lower transport cost, the possibility of reaching more customers and opening up new markets. In 1998 Daimler-Benz decided to increase its share in the American market and merge with the Chrysler Corporation. The merger of Daimler-Chrysler cost $38 billion dollars and was one of the largest industrial mergers in history. It turned the company into the third largest car manufacturer in the world.
Today Daimler Benz is the largest industrial enterprise in Germany with a turnover of 3.1 billion Euro and 416 000 employees worldwide. It has manufacturing plants in 37 countries and sells its products in more than 200. In the year 2000, 4.2 million passenger cars and 549 000 commercial vehicles were sold.
Mercedes-Benz headquarters are in Stuttgart in Germany; the headquarters of DaimlerChrysler are in Auburn Hills, Michigan. Global brands that are part of the group include Dodge, Smart, Frightliner, Sterling, Western Star, Thomas Built Buses, Setra, Orion, American LaFrance, MTV and TEMIC.
Like many brands, Mercedes-Benz has started to diversify. Apart from cars Mercedes now offers clothing, leather goods, watches, jewelry, etc. in its brand name. This growing trend shows that in ever more competitive markets the creation of a good image and a well-known brand name is vital for the continuing success of the product.
