This was the final year of the 750 kg Formula, a fact known to all participants from the start of the season — the AIACR had already agreed a new 3-litre supercharged / 4.5-litre unsupercharged limit for 1938. The result was an arms race pushed to its logical extreme: engine development that had begun with cars producing around 300 bhp in 1934 now yielded machines exceeding 600 bhp, while the average family saloon of the era produced around 25 bhp. The championship was scored on a points system that rewarded podium finishes and completing over 75% of a race distance, making absences disproportionately costly.
The Mercedes-Benz W125 was the defining machine of 1937. Fitted with a supercharged 5.66-litre M125 straight-eight engine, it produced between 592 and 646 bhp depending on preparation and fuel blend. Its combination of power, aerodynamic body, and improved suspension made it the most formidable car of the formula.
Auto Union responded with the Type C, evolved throughout the year with its mid-mounted supercharged V16 engine growing to over 6.0 litres and producing more than 520 bhp. The car remained challenging to drive but Bernd Rosemeyer and Ernst von Delius had mastered its quirks sufficiently to remain competitive.
Alfa Romeo and Maserati were no longer able to challenge for outright victories; Scuderia Ferrari focused on completing races and scoring places rather than fighting the German teams for the lead.
The championship opened at Spa-Francorchamps for the Belgian Grand Prix, though many of the German team's leading drivers — including Caracciola — were absent, having chosen to race in the United States at the Vanderbilt Cup. This race and subsequent rounds demonstrated the fundamental tension in the scoring system: a race missed cost as much as a race won.
Caracciola won three of the five championship rounds, enough to secure the title despite not appearing in the Belgian opener. Mercedes' internal discipline and strategic management of the season gave the team a collective advantage over Auto Union, where the spirited but occasionally erratic Rosemeyer took individual victories and set blistering lap times without consistently converting them into championship points.
Hermann Lang, the former Mercedes mechanic-turned-reserve driver, continued to develop his reputation within the team, recording competitive performances that suggested he would be a force once the next formula arrived.
The season was staged against an increasingly tense European political backdrop. The German government's support of both national teams went beyond financial subsidy to encompass direct involvement in team selections and race entries. Italy and France both made competing national investments in motorsport infrastructure, though without the same results.
Caracciola claimed the European Championship. The scoring system, which counted podium finishes and race completions, rewarded his consistency and participation across more rounds than his rivals. Auto Union's Rosemeyer was the most spectacular driver of the season but the championship format penalised his more erratic finishing record. Hermann Paul Müller did not feature in the championship standings significantly at this stage — his contribution to the 1939 title debate lay in the future.
The 1937 season brought the 750 kg Formula to its maximum expression. The combination of unprecedented power, light weight, and the narrow, unprotected road circuits of the era made it one of the most demanding environments any grand prix driver had ever faced. The move to the new formula for 1938 was widely understood as a safety necessity, not merely a regulatory evolution. For Mercedes-Benz, the season confirmed Caracciola as the outstanding consistent performer of the era. For Auto Union, Rosemeyer's brilliance remained the team's primary asset — his death in a record attempt on the Frankfurt Autobahn in January 1938 would prove a devastating blow to the team going into the new formula.