Benz & Cie. and Daimler-Motoren-Gesellschaft (DMG), founded by Gottlieb Daimler and Wilhelm Maybach, were fierce competitors in the early automobile industry. Both companies made significant contributions to the development of the automobile, often independently.

As the automobile market matured, competition between Benz and Daimler intensified. Both companies sought to improve their vehicles, expand their market share, and reduce production costs.

World War I had a significant impact on the German economy and the automotive industry. Both Benz & Cie. and DMG faced challenges related to raw material shortages and government regulations.

Due to the difficult economic situation in postwar Germany, Benz & Cie. and DMG entered into an 'Agreement for Mutual Interest'. This agreement standardized design, production, purchasing, sales, and advertising to reduce costs.

Benz & Cie. and Daimler-Motoren-Gesellschaft formally merged to form Daimler-Benz AG. This merger combined the expertise and resources of two of the most important pioneers of the automobile, creating a powerful force in the automotive industry. The vehicles were then marketed as Mercedes-Benz.