Karl Benz's company, Benz & Cie., entered a single car in the world's first motor race, the 1894 Paris-Rouen, where it finished fourteenth. In 1908, Benz scored second and third at the French Grand Prix behind the winning Mercedes entry. The Blitzen Benz, derived from Grand Prix machinery but fitted with an engine intended for airships, set a land speed record of 228.1 km/h in 1911, a figure that exceeded the speed of any contemporary train or aircraft.
After the First World War, Benz chief engineer Hans Nibel licensed the teardrop-shaped Rumpler Tropfenwagen design and introduced a mid-engine layout to Grand Prix racing at the 1923 Italian Grand Prix at Monza. The Benz Tropfenwagen demonstrated promising roadholding but did not achieve race victories in three years of competition, and financial difficulties led Benz to merge with the Daimler-Motoren-Gesellschaft in 1926.
The Mercedes Simplex of 1902, built by Daimler-Motoren-Gesellschaft, was the first purpose-built production racing car, much lower than the carriage-like vehicles of the period. In July 1914, the DMG Mercedes 18/100 GP won the French Grand Prix, finishing first, second, and third — a sweep achieved with a formula restricting engine capacity to 4,500 cc and weight to 1,100 kg.
After the war, Ferdinand Porsche joined Daimler and upgraded pre-war cars for racing. To blend in with Italian entries at the Targa Florio, the cars were painted red rather than the customary German white. Giulio Masetti won the 1922 Targa Florio in a pre-war Daimler Mercedes 4.5-litre GP car. Christian Werner won the 1924 Targa Florio in a smaller 2-litre supercharged model, again painted red. The inaugural German Grand Prix at AVUS in Berlin in 1926 was won by Rudolf Caracciola driving a modified Mercedes GP car as a privateer, as Daimler was occupied with the merger with Benz.
Following the merger, the unified Mercedes-Benz company built the supercharged S-series sportscars — S, SS, SSK — with engines of up to 7 litres and around 300 horsepower. These were raced extensively by customers through the late 1920s and early 1930s. Rudolf Caracciola won the 1931 Mille Miglia and the 1931 German Grand Prix with the SSK.
When new Grand Prix regulations were announced for 1934, limiting dry weight to 750 kg with no engine size restriction, Daimler-Benz committed to a multi-year factory Grand Prix programme, aided from 1933 by subsidies from the German government. Auto Union, running Ferdinand Porsche's rear-engined P-wagen design, received similar support.
Both companies introduced cars producing around 300 horsepower from approximately 3-litre engines at roughly half the weight of the large SSK. The Mercedes-Benz W25 and Auto Union A appeared in natural aluminium — after paint was stripped to meet the weight limit, so the story goes — and the press named them Silver Arrows. The two teams won only a handful of races in 1934, but with steadily growing engine displacement and power — rising to over 600 horsepower in the 1937 Mercedes-Benz W125 — they dominated from 1935 to 1937. Rudolf Caracciola became European Champion in 1935, 1937, and 1938; Bernd Rosemeyer took the title for Auto Union in 1936.
For 1938, regulations limited engines to 3 litres, but new V12-powered machines, the Mercedes-Benz W154 and Auto Union Type D, maintained the same pace. The Italian, French, and British manufacturers concentrated on the smaller Voiturette class during this period. When the 1939 Tripoli Grand Prix was run to Voiturette rules in what appeared to be an attempt to exclude the German cars, Mercedes responded by building the tiny W165 in just eight months. It won the 1939 Tripoli race.
The Silver Arrows programme was guided by Alfred Neubauer, the team manager who remained in post from the mid-1920s until racing ceased at the start of the Second World War. Neubauer developed the pit-board signalling systems and strategic discipline that became a model for later Grand Prix team management.
Mercedes-Benz's prewar racing record, built across the separate histories of Daimler and Benz and then the merged company, established the Silver Arrows as among the most technically formidable racing cars ever built. The record speed runs with the unrestricted pre-war cars reached 435 km/h. The prewar programme directly informed Mercedes-Benz's postwar return to racing in 1952 and Formula One in 1954.