The hyphenated brand name Mercedes-Benz was established after that merger. The brand name Daimler had been licensed for use on other automobiles in France and the United Kingdom, and was therefore not available to Daimler-Benz. Instead, the name of its seminal Mercedes model designed by Maybach over twenty years before was chosen for the DMG portion of the new brand. ("Mercedes" had been painted on a DMG vehicle used in races by a man in honor of his daughter, and became the formal name of a DMG model in 1902, see below.) Thus, Mercedes-Benz became the brand name applied to the models of one of the new firm. Because of its eponymous tie to Karl Benz and his early vehicles, Mercedes-Benz is also the name of the world's oldest continuously produced automobile line.

As part of the 1926 merger, a new logo was created that would include a symbol for each and integrate the names of the two former companies. A three-pointed star had been designed by Gottlieb Daimler, to show the ability of his motors for land, air, and sea use. This star first appeared on a DMG model in 1909, so it was chosen for the new logo. The traditional laurel wreath symbol used by Karl Benz was added along with his name to complete the new logo. The logo with a plain ring, as seen today, was not used until 1937.

In 1998, Daimler-Benz and Chrysler agreed to combine their businesses — promoted as the "merger of equals" — and the new entity was named DaimlerChrysler AG.
On May 14, 2007, the separation of Daimler and Chrysler was announced. Selling Chrysler has been seen as a positive move for Daimler by its shareholders, who hope that the separation will allow Daimler's car brand Mercedes-Benz to be free to do what it does best without having the distractions of its heavily unprofitable U.S. partner Chrysler. However, Daimler retains a 20 per cent minority stake in Chrysler.

The origins of the Daimler-Benz company founded through a merger in 1926 date back to the mid-1880s, when Gottlieb Daimler (1834–1900) working with Wilhelm Maybach (1846–1929), and Karl Benz (1844–1929) independently invented the internal combustion engine-powered automobile, in southwestern Germany. Although they were merely sixty miles apart, these pioneers were unaware of each other's early work.
Karl Benz had his shop in Mannheim where he invented "the world's first true automobile powered by an internal combustion engine" in 1885. It had three wheels. He was granted a patent for his vehicle dated January 29, 1886, for what he called the "Benz Patent Motorwagen." Among many inventions, Benz patented his first engine in 1879, a high-speed single-cylinder four-stroke engine of his own design which he included in his "integral" design for the Motorwagen patent application.

In 1885, Gottlieb Daimler and design partner Wilhelm Maybach, working in Cannstatt, Stuttgart, were granted a patent dated August 29, 1885 for what is generally recognized as the prototype of the modern gas engine, that they named the "grandfather clock engine."
On March 8, 1886, Daimler purchased a stagecoach made by Wilhelm Wimpff & Sohn and he and Maybach adapted it to hold this engine, thereby creating a four-wheeled carriage propelled by an engine, as many had before them. The only distinction about this carriage was that it carried an internal combustion engine. None of many similar attempts to adapt carts, boats, or carriages, in many countries, were propelled by this type of engine. On the official history pages of the Mercedes-Benz Internet site it is referred to as "a carriage — without a drawbar but with the conventional drawbar steering. A carriage without horses..." Daimler and Maybach later purposely built, from scratch, the first four-stroke engine powered automobile with four wheels in 1889. They founded Daimler Motoren Gesellschaft, DMG, in 1890 and sold their first automobile in 1892.

Stationary engines were his major business and he invented many improvements to them and their application, but Karl Benz continued to refine his Motorwagen through several models and sold his first automobile in 1888. He built his first four-wheeled model in 1891. Benz & Cie, the company started by the inventor, became not only the world's first, but also largest manufacturer of automobiles by 1900.
In 1899, DMG automobiles built at Untertürkheim (a city district of Stuttgart) were raced successfully by Emil Jellinek (1853-1918), an automobile enthusiast and dealer. He had the name of his daughter, Mercedes, painted on the automobiles for good luck. Wanting faster race cars, it was Jellinek who spurred the development of the seminal 1902 DMG model that would be the first of the DMG Mercedes series, bearing the name of his daughter.

After suggesting some design specifications, he promised to purchase thirty-six of the new DMG model if Maybach would name the new 35-hp engine contained in it, the Daimler-Mercedes engine. A contract of five hundred and fifty thousand marks was made for these new models. Within weeks he contracted for thirty-six of another DMG model with 8-hp engines. He was granted an exclusive concession to sell the new DMG automobiles in Austria-Hungary, France, Belgium, and USA.
That new model later would be named "Mercedes 35 hp" (in 1902) and it was a very important advance in automobile design. The contract called for delivery of the first automobile to Jellinek in the Fall, but it did not reach him until December 22, 1900. He became obsessed with the name Mercedes and even had his name changed to Jellinek-Mercedes. Jellinek was invited to sit on the DMG board of directors, which he did from 1901 until 1909, when he retired from automotive activities in favor of diplomatic appointments.

The name change also was helpful in preventing legal troubles, because after the death of Daimler, DMG had sold exclusive rights to the name, Daimler, and technical concepts to companies abroad. As a result, luxury automobiles branded Daimler were, and still are, built in England. A fire that gutted the old Steinway piano factory in New York, which had been converted to produce the new Mercedes models, cut short the dream of American production.

The rival companies of Daimler-Motoren-Gesellschaft (DMG) and Benz & Cie. started to cooperate in 1924, due to necessity arising from a troubled German economy after World War I, and finally merged in 1926 to become Daimler-Benz AG, which produced Mercedes-Benz automobiles and trucks. The merger agreement established that the two companies were required to remain together until 2000. While focusing on land vehicles, Mercedes-Benz also built engines to power boats and airplanes (military and civil), and even Zeppelins. Karl Benz died in 1929.

Although the brand is most famous for limousine models, a significant number of notable sports cars have also been produced. For example, the early supercharged SSK developed by Ferdinand Porsche.

Another distinctive model was the iconic 300SL Gullwing of 1954; that was suggested by Max Hoffman, explicitly for the USA market, and introduced at the New York Automobile Show.

Mercedes-Benz has also produced higher volume, less expensive cars. Interestingly, the prototypes of the Volkswagen were built and tested in Stuttgart, in cooperation with Porsche. Before that, Mercedes-Benz had a similar rear-engined, yet rather unsuccessful, small car, the 130 H. In recent years Mercedes have produced the A-Class, relatively inexpensive compared to its other models. Also the Smart brand of small affordable automobiles has been part of the Mercedes-Benz Group since 1994 and are still producing cars today in conjunction with DaimlerChrysler AG.

Mercedes-Benz has also produced a supercar with McLaren Cars, an extension of the collaboration by which Mercedes engines are used by the Team McLaren-Mercedes Formula One racing team, which is part owned by Mercedes. Many anticipate there to be a range of McLaren--Mercedes supercars produced in Woking (McLaren’s manufacturing headquarters). The 2003 Mercedes-Benz SLR McLaren has a carbon-fiber body with a 5.5l V8 supercharged engine. This is the same block as featured in other Mercedes-Benz automobiles, such as the SL55 AMG and the CLS55 AMG, it has however been tweaked to give 454kw and 780nm of torque. The SLR has a maximum speed of 334km/h and costs approximately US$500,000.

The most recent new joint-venture model, expected to reach production, is the mid-engine P8 supercar. Based around a unique carbon fiber monocoque, manufactured by McLaren, the P8 was originally predicted to receive the new naturally aspirated 6.3L V8 from Mercedes-AMG, but insiders now say that the engine will be modified for the car and will probably be twin- turbocharged to produce in excess of 600 bhp. The car is still in development, but likely to reach production to go on sale in early 2008, and have a price tag less than that of the SLR.

Mercedes-Benz also produces buses, mainly for Europe and Asia. The first factory to be built outside of Germany after WWII was in Argentina. It originally built Truck-Buses, named Colectivo in Buenos Aires, Argentina (1950-1987), but now builds buses.

Mercedes-Benz automobiles are very popular among performance-oriented buyers, and many companies have become tuners/modifiers of these cars, adding even more performance and luxury to the brand. AMG is Mercedes-Benz's performance-tuning division specializing in high performance versions of most Mercedes-Benz cars. AMG engines are hand-built and the completed engine received a tag with the signature of the engineer who built it. AMG has been fully-owned by Mercedes-Benz since 1999.

In the 1980s Mercedes built the world's first robot car, together with the team of Professor Ernst Dickmanns at Bundeswehr Universität München. Partially encouraged by Dickmanns' success, in 1987 the European Union's EUREKA programme initiated the Prometheus project on autonomous vehicles, funded to the tune of nearly 800 million Euros. A culmination point was achieved in 1995, when Dickmanns´ re-engineered autonomous S-Class Mercedes took a long trip from Munich in Bavaria to Copenhagen in Denmark and back. On highways the robot achieved speeds exceeding 175 kilometres per hour (roughly 110 miles per hour; there is no general speed limit on the German Autobahn). The car's abilities left a big impression on many observers, and heavily influenced robot car research and funding decisions world-wide.

The "Safety cage" or "Safety cell" construction with front and rear crumple zones was first developed by Mercedes-Benz in 1951.

Anti-lock brakes (ABS), traction control and airbags in the European market, were all Mercedes-Benz innovations. These technologies were introduced in 1978, 1986 and 1980 respectively. In September 2003, Mercedes-Benz introduced the world's first 7-speed automatic transmission called '7G-TRONIC'.

Mercedes-Benz's PRE-SAFE uses radar to detect an imminent crash and prepares the car's safety systems to respond optimally. Occupants are also prepared by tightening the seatbelt, closing the sunroof and windows, and moving the seats into the optimal position.

Mercedes Benz is in the process of pioneering a fatigue-detection system that warns the driver when they are displaying signs of micro-sleep (when the eyes stay closed for slightly longer than a natural blinking action). The system will use a variety of data including the individual driving style, the duration of the journey, the time of day and the current traffic situation. Fatigue mostly sets in gradually.

The fastest (production) automatic road car in the world is the Mercedes-Benz SLR McLaren at 334 km/h (208 mph). The car was co-developed by DaimlerChrysler and McLaren Cars. The fastest street-legal saloon car in the world is the Mercedes-Benz BRABUS (tuned) W211 'E V12' - based on the E-Class saloon.

Since its inception, Mercedes-Benz had a reputation for quality and durability. Increased focus on costs and volume, and the increased complexity in modern automobile electronics led to falling quality in the late 1990s and early 2000s. By 2005, Mercedes temporarily returned to the industry average for initial quality (if the "complexity" variable was ignored), according to J.D. Power. In J.D. Power's Initial Quality Study for the first quarter of 2007, Mercedes showed dramatic improvement by climbing to 4th place, surpassing quality leader Toyota and earning several awards for its models.

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