DaimlerChrysler began as separate companies on two continents. Walter P. Chrysler teamed with three Studebaker engineers to produce the first Chrysler vehicle. Daimler began as Daimler-Benz, the last names of two men who developed the first automobiles in Germany in 1886.
Daimler's early fame came in 1901 with the Mercedes, a race car named after the owner who purchased the vehicle. Mercedes continues its involvement in auto racing as a long-time Formula 1 constructor. Chrysler's first vehicle, the Chrysler Six, debuted in 1924. The $1,565 vehicle included two new features: a lightweight high-compression six-cylinder engine and hydraulic brakes on all four wheels.
Daimler was among the engine manufacturers for the Nazis during World War II with the LG 3000 truck engine as well as the DB 600 and DB 601 airplane engines. Chrysler's history includes the development of the first V-8 engine in 1951 and the fully automatic Powerflite transmission several years later.
Daimler became the first automobile manufacturer to exceed $1 billion in annual turnover in 1954 and had a near monopoly on European diesel engines during the 1950s. Chrysler brought out its Forward Look design during the 1950s. Changes included the use of frame tailfins to aid its vehicles' high-speed stability.
After Daimler opened a production plant in Tuscaloosa, Alabama, in 1995, Daimler and Chrysler agreed on a merger in 1998. Company officials stated DaimlerChrysler formed to protect the companies' competitive advantage in the long term.