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Daimler-Benz AG was a German manufacturer of automobiles, motor vehicles, and engines which was founded in 1926. They made their first cars in 1886, the Daimler motor carrage and a motorized bicycle with three wheels. These were the first cars ever built, sometimes making Daimler and Benz 'the fathers of the automobile'. An Agreement of Mutual Interest—which would be valid until the year 2000—was signed on May 1, 1924 between Karl Benz's Benz & Cie. and Daimler Motoren Gesellschaft, which had been founded by Gottlieb Daimler and Wilhelm Maybach. Daimler had died in 1900 and Maybach had left in 1907.
first logo of Mercedes-Benz from 1926 merger of the companies founded separately by Karl Benz and Gottlieb Daimler, becoming Daimler-Benz AG

Both companies continued to manufacture their separate automobile and internal combustion engine brands until, on June 28, 1926, when Benz & Cie. and DMG formally merged—becoming Daimler-Benz AG—and agreed that thereafter, all of the factories would use the brand name of Mercedes-Benz on their automobiles.

The inclusion of the name, Mercedes, in the new brand name honored the most important model series of DMG automobiles, the Mercedes series, which were designed and built by Wilhelm Maybach. They derived their name from a 1900 engine named after the daughter of Emil Jellinek. Jellinek became one of DMG's directors in 1900, ordered a small number of race cars built to his specifications by Maybach, stipulated that the engine must be named Daimler-Mercedes, and made the new automobile famous through motorsports. That race car later became known as the Mercedes 35 hp. The first of the series of production models bearing the name, Mercedes, had been produced by DMG in 1902. Jellinek left the DMG board of directors in 1909.

The name of Daimler as a brand of automobiles had been sold by DMG—following his death in 1900—for use by other companies, so the new company, Daimler-Benz, would have created confusion and legal problems to include Daimler in its new brand name, and therefore, used Mercedes to represent the DMG interest. Karl Benz remained as a member of the board of directors of Daimler-Benz AG until his death in 1929.

Although Daimler-Benz is best known for its Mercedes-Benz automobile brand, during World War II it also created a notable series of aircraft, tank, and submarine engines.

In 1998 Daimler-Benz AG merged with the American automobile manufacturer, Chrysler Corporation, and formed DaimlerChrysler AG.

Nowadays, Mercedes-Benz are still one of the top brands of cars avaliable. Many vehicle tuning brands are now working with Mercedes, such as BRABUS and AMG. But some people feel that the quality of the 'Original Automobile' is fading. The interiors of the new cars feel quite cheap and contain hidden plastic. DaimlerChrysler say that with their 2006 and 2007 cars, interior quality will be improved to keep competetive against other German car manufacturers like BMW and Audi.