The origin of the company dates back to the 1880s, when Gottlieb Daimler and Karl Benz invented the internal combustion engine-powered automobile independently, in southwestern Germany. Daimler and Wilhelm Maybach, who together invented the four-stroke engine, worked together in Cannstatt (a city district of Stuttgart); Benz had his shop in Mannheim near Heidelberg. There is no record of the two inventors ever having met. The company's logo has become the symbol of luxury as far as cars are concerned. When you see a Mercedes logo, you think of excellence and class. The logo consists of a three point silver star, surrounded by a circle. This symbol represents Daimler's original wishes to create an engine that is small, reliable, and powerful. They are meant to be able to travel on land, air, or sea.

In the early 1900s, the Daimler cars built at Untertürkheim (also a city district of Stuttgart) were raced successfully by an Austrian dealer named Emil Jellinek, who entered the cars under the name of his daughter, Mercédès. After suggesting some design modifications, he promised the company a large order on the conditions that he was granted the exclusive Daimler concession for Austria-Hungary, France, Belgium and USA, and that he would sell the new model branded as "Mercedes." The name change was also helpful in preventing legal troubles, as Daimler had sold exclusive rights to the name and technical concepts to companies abroad. As a result, luxury cars known as Daimler were and are built in England. A fire that gutted the old Steinway piano factory in New York that had been converted to produce Mercedes cars cut short the dream of an American-built Mercedes.

The rival companies of Daimler Motorengesellschaft and Benz & Cie. started to cooperate in the 1920s to deal with the economic crisis of those years, and finally merged in 1926 to become the Daimler-Benz AG, which produced Mercedes-Benz cars and trucks. The brand's logo is the three-pointed silver star enclosed in a circle, which symbolizes Daimler's original quest to provide small powerful engines to travel on land, sea and air. While focusing on land vehicles, Mercedes-Benz also built engines to power boats and airplanes (military and civil), and even Zeppelins.

During the Second World War, Mercedes-Benz is known to have exploited more than 30 000 forced workers and prisoners of war, some of whom would eventually strike and be sent to concentration camps. This working force soon became essential to the production capacity of the company since 1941, and was a key to the construction of the Nazi Germany's Luftwaffe and war machine. Always on the edge as far as technology is concerned, Mercedes-Benz was the first to introduce things such as fuel injection and anti-locking brakes. These are just a couple among many. Sometimes, though, Mercedes takes the edge too far, and it costs them a lot of money. Recently, they introduced an active brake system which they installed in over six hundred thousand Benz's. This ended up causing problems in the cars, and causing a massive recall that cost the company millions and millions of dollars. Even more, the consumer results from the late eighties showed that the reliability of Mercedes was falling off what it used to be. For this reason, as of late, Mercedes has invested a lot in making their cars the best and most reliable in the World. For the past few years, the company has brought back the trust in the brand's reliability.